Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Preston Corporation Bill [Lords].

Read the Third time, and passed.

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

BELLAHOUSTON HOSPITAL.

Mr. N. MACLEAN: 1.
asked the Minister of Pensions whether he is aware that, although permits to enter Bellahouston Hospital and interview cases have been granted to the British Legion, the Association for the Limbless, and the New Advisory Committee, by the Scottish Regional Director, a permit for a similar purpose has been refused to the representative of the International Union of Ex-service Men; whether he can state what is the reason for this refusal; and whether he will issue instructions that equal facilities, given to other ex-service men's organisations, will also be granted to the International Union of Ex-service Men?

The MINISTER of PENSIONS (Mr. Macpherson): The hon. Member appears to have been misinformed. No such permits have been issued to any of the bodies mentioned, and the remainder of the question, therefore, does not arise.

Mr. MACLEAN: Are not these allegations taken from recent statements made by representatives of this organisation? Will the right hon. Gentleman take that into consideration?

Captain GEE: Is it not a fact that this organisation has been trying to undermine discipline in the Army and the forces of the country?

Mr. MACLEAN: Does not this organisation represent bonâ fide ex-service men, and are they not entitled to consideration in every case put before the Minister?

Captain GEE: Not for revolutionists.

Mr. MACLEAN: Hold your tongue.

SCOTTISH BORDERERS (PRIVATE R. MAIR).

Mr. MACLEAN: 2.
asked the Minister of Pensions whether he is aware that no pension is being paid on behalf of the children of the late Private Robert Mair, No. 43,089, King's Own Scottish Borderers, although his widow has made frequent application; and whether he can state when this case is likely to be decided?

Mr. MACPHERSON: The widow being ineligible for pension, an award under Article 17 of the Royal Warrant was made in respect of the children by the first marriage, and this pension has been in payment since January last. An appeal against the decision of the Ministry that the soldier's death was not due to service has recently been lodged and has been forwarded to the Pensions Appeal Tribunal for decision.

Mr. MACLEAN: Is it not the case that the pension is much in arrear and is not being paid just now?

Mr. MACPHERSON: That is not the question the hon. Member put. I understand the pension has been paid from January last. If the hon. Member has any further particulars about this case I shall be glad to look into them.

ADMINISTRATION GLASGOW AREA.

Mr. MACLEAN: 3.
asked the Minister of Pensions whether he is aware of the public dissatisfaction in Glasgow in the administration of the War pensions in the Glasgow area; that there is a feeling that the regional officers are giving rulings which are at variance with the decision of the Local War Pensions Committee, and that the Local War Pensions Committee resigned because of the difficulties created by these rulings; and whether he is prepared to have a full inquiry into the administrations of the War Pensions Committee for the Glasgow area?

Mr. MACPHERSON: The answer to all parts of this question is in the negative.

LOCAL COMMITTEES.

Mr. LAWSON: 4.
asked the Minister of Pensions whether it is the policy of the Ministry to transfer the powers of local pension committees to the areas, so that the work carried out by these committees will in a short time be undertaken by permanent officials of the Ministry?

Mr. MACPHERSON: My hon. Friend may remember that the working of the local committee system was specifically included in the terms of reference to the Departmental Committee of Inquiry which I appointed last November. Until the report of that Committee is in my hands, I do not propose to make any statement.

Mr. LAWSON: Is it not a fact that the right hon. Gentleman has already, in anticipation, probably, of the Departmental Committee's report, transferred powers from local committees into the hands of area officials? Is he aware that already local committees are esnding circulars and resolutions protesting against this transfer of powers—I refer to circular 2032—and at the same time the representatives of local committees are now refused the right to represent applicants before the Appeal Tribunal, because the Ministry representative says they are usually hostile to the Ministry? I think that demands an answer.

Mr. SPEAKER: A question must be put briefly and clearly if the hon. Member wishes to obtain an answer.

ST. DUNSTAN'S.

Mr. T. GRIFFITHS: 5.
asked the Minister of Pensions whether, in view of his statement of the 12th May, the 60 Winded men who on 11th May were awaiting admission to St. Dunstan's have yet been admitted?

Mr. MACPHERSON: Of the 57 men awaiting admission on the 11th May, 16 have now been accommodated. I am informed that it is hoped to admit the remainder within the next few weeks.

MEDICAL REFEREES.

Mr. J. GUEST: 6 and 7.
asked the Minister of Pensions (1) whether, seeing that the original appointments of medical referees were made before the completion of medical demobilisation, these appoint-
ments will now again be declared vacant and re-advertised, or whether the original appointments are the fixed and permanent appointments of the present holders;
(2) whether the appointments of medical referees are now reviewed every six months as originally decided; how many of these appointments have been considered vacant on review and changed; and whether the opinion of the local pensions committee is ever asked or considered in these appointments?

Mr. MACPHERSON: In the latter part of 1919, when the demobilisation of medical men was practically complete, the then existing appointments of medical referees, to the number of 962, were declared vacant, and 1,553 new appointments were made, preference being given to those men who had served overseas during the War. All the present appointments are temporary, being subject to one month's notice on either side. While the paramount consideration in making these appointments must be medical, consideration is always given to representations made by local committees.

Mr. GUEST: 8.
asked the Minister of Pensions what is the total number of medical referees employed locally and centrally on pensions work; what is the total cost to the country; what fees are now paid for this work; what is the average per claimant pensioner; and whether all the appointments are part-time?

Mr. MACPHERSON: The Ministry utilises the services of 1,717 medical referees, whose appointments are part-time and subject to a month's notice. Payment is made at the rate of 5s. per case, except where the examination is in connection with a claim to alternative pension, when the fee is 10s. 6d. The amount paid in fees to medical referees during the last financial year was approximately £250,000.

Sir W. PEARCE: Is there a transfer of duties formerly performed by War Pensions Committees to the medical referees?

Mr. MACPHERSON: I do not think so. They deal purely with the medical aspect of a case, and the local pensions committees deal mainly with the facts.

Oral Answers to Questions — GOVERNMENT STAFFS AND OFFICES.

PENSIONS OFFICES, ACTON.

Sir H. BRITTAIN: 9.
asked the Minister of Pensions what will be the total cost of the new pensions offices at Acton; how many of the staff have already been installed; and when it is expected that the building will be completed?

Lieut.-Colonel Sir J. GILMOUR (for the First Commissioner of Works): The total cost of the temporary huts was £25,000, and the estimated cost of the permanent building is £482,000. The number of staff in occupation of the former is 840, and of the completed portion of the latter 793. It is anticipated that the new building will be wholly completed by the end of the present financial year.

Sir H. BRITTAIN: Has there not been considerable delay compared with the original date suggested for the completion of this building? Have any arrangements been made to convey the very large staff, about 6,000, to and from this building, seeing that no tube or railway is in the vicinity?

Sir J. GILMOUR: I do not know as to delay. In the case of all these buildings, there has been delay, because of the difficulty of obtaining materials and labour. As to the conveyance of the staff, I cannot answer the question without notice.

Colonel ASHLEY: In view of the enormous sum of money which is being spent on this building, can the hon. and gallant Gentleman state what saving is being effected by vacating buildings now in occupation?

Sir J. GILMOUR: I could not do that without notice, but there is bound to be a saving in rental.

Colonel ASHLEY: Could the hon. and gallant Gentleman say whether the saving effected represents the interest on the money being expended on the new building?

Mr. SPEAKER: The hon. and gallant Member had better put that question down.

Sir H. BRITTAIN: Is it not a fact that there will be a considerable
amelioration of health caused by the removal to Acton?

Sir J. GILMOUR: I have no doubt that will be the case.

ANNUAL LEAVE.

Mr. T. THOMSON: 39.
asked the Prime Minister what is the total number of civil servants of all classes who are entitled to over four weeks' annual holiday.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young): I have been asked to reply. I regret that precise-information is not immediately available. The number of civil servants entitled, subject to the exigencies of the public service, to annual leave in excess of four weeks a year is certainly but a small percentage of the whole, and the value of exact figures would not appear to warrant, the labour and cost of their compilation.

CIVIL SERVICE ARBITRATION BOARD.

Mr. GILBERT: 78.
asked the Chancellor of the Exchequer what was the date of setting up the Arbitration Board for civil servants; what has been its personnel since its inauguration; whether its reference includes questions of reduction as-well as applications for increase of remuneration of classes of civil servants; and from what dates have bonuses been awarded to those in receipt of salaries of more than £500 and £1,000, respectively?

Mr. YOUNG: The Civil Service Arbitration Board was set up in February, 1917. The personnel has been as follows:

Chairmen:

Sir William J. Collins, K.C.V.O., M.P. February, 1917, to June, 1918.
Sir Francis Gore-Browne, K.C. July, 1918, to September, 1920.
Charles. A. Russell, Esq., K.C. October, 1920, onwards.

Members:

Sir Alexander Kaye Butterworth. February, 1917, to April, 1920.
Sir Robert Turnbull, M.V.O. December, 1918, to August, 1919.
Harry Gosling, Esq., C.H., J.P. From February, 1917, onwards.
Sir Guy Granet.
April, 1920, onwards.

The terms of reference of the Board enable it to deal only with questions
arising with regard to claims for increased remuneration. War bonus was awarded to civil servants in receipt of salaries exceeding £500 but not exceeding £1,000 per annum with effect from the 1st January, 1918, and to officers in receipt of salaries exceeding £1,000 with effect from the 1st January, 1919.

Oral Answers to Questions — IRELAND.

MURDERS.

Mr. BRIANT: 16.
asked the Chief Secretary for Ireland whether Thomas Fitzgerald, a railway man at Mallow, County Cork, was shot dead and his brother seriously wounded on the night of 28th May by armed men who took them out of their house and shot them half a mile away; and whether an inquiry has been held and any arrests made?

The CHIEF SECRETARY for IRELAND (Colonel Sir Hamar Greenwood): I am informed by the Commander-in-Chief that Thomas Fitzgerald, who was gatekeeper at Sissanisky level crossing, was brutally murdered in the manner described, and I am sorry to say his brother Henry, an ex-soldier, who was wounded at the same time, died some hours later. Before his death, Henry Fitzgerald stated that he and his brother were called out at 1 a.m. by eight or nine men armed with revolvers and told they were to do their share in cutting some trenches. When some distance away from their home, they were told that they were spies, and were ordered to halt and face the ditch. Their hands were tied behind them, and the murderers then fired into their backs. The Court of Inquiry found wilful murder by some person or persons unknown. Up to the present no arrests, have been made, but the police are pursuing their inquiries.

Mr. T. THOMSON: 20.
asked the Chief Secretary what is the result of the inquiry into the death of Arthur Burdon, who was shot dead near Dundrum on the morning of the 19th May; and whether any arrests have been made?

Sir H. GREENWOOD: The Court of Inquiry, in lieu of inquest, found that Arthur Burdon was killed on 19th May by gunshot wounds inflicted by a person or persons unknown, who are thereby guilty of wilful murder. The police report that no one appears to have wit-
nessed the act and they have been unable at present to make any arrest. Burdon was a clerk at Guinness's brewery, and was shot while cycling to his work. There were seven wounds inflicted at close range. He was friendly with the police, to whom he was well known.

Sir J. BUTCHER: 55.
asked the Chief Secretary whether he can give the House any information as to the murder of the Very Reverend John Finlay, late Dean of Leighlin, on Saturday night last; what motive can be suggested for this crime; and whether any arrests have been made?

Sir H. GREENWOOD: According to the police report on this diabolical outrage, at two o'clock last Sunday morning about 50 armed and disguised men called at Dean Finlay's house at Bawnboy, County Cavan. The Dean himself went to the door and shortly afterwards aroused his wife, his sister-in-law and three servants, and told them that they had to leave in ten minutes. The raiders took the inmates of the house, with the exception of the Dean himself, to the house of a neighbour, and in response to the anxious inquiries of Mrs. Finlay, they told her that her husband would shortly be allowed to join her. At 5 a.m., when Mrs. Finlay and the others returned, they found the house completely demolished by fire, and lying on the lawn the Dean's dead body with a frightful wound in the back of the skull. It is difficult to suggest a motive for the brutal murder of this aged Protestant clergyman. Dean Finlay was 80 years old. He retired some years ago from the Deanery of Leighlin, and was extremely popular in the district as a generous friend to the poor.

Sir J. BUTCHER: Have any arrests been made in connection with this infamous crime?

Sir H. GREENWOOD: I regret I have myself no personal knowledge of arrests. All I can say is that special police arrangements have been made in the district, in the endeavour to seek out the crowd of men responsible for this outrage.

Colonel ASHLEY: Can the right hon. Gentleman explain why the hon. Member for the Falls Division (Mr. Devlin) did not raise this murder when he moved the Adjournment of the House?

Mr. MacVEAGH: rose
—

Mr. SPEAKER: Hon. Members had better keep their own consciences.

Mr. GALBRAITH: 56.
asked the Chief Secretary whether an inquiry has been held into the death of a man named Macarthy, at Ovens, Bellincollig, on the 28th May; and whether any arrests have been made?

Sir H. GREENWOOD: I am informed by the Commander-in-Chief that the Court of Inquiry in lieu of inquest in the case of Daniel Macarthy, of Knockamore, County Cork, found that the deceased was murdered by a person or persons unknown. He was found dead with a label inscribed, "Spies and Informers Beware, I.R.A." The unfortunate man was apparently half-witted. On 27th May he presented himself at Ballincollig Military Barracks, and asked for work and was detained for investigation. He was then released. On these meagre grounds he was presumably suspected by the Irish Republican Army of being a spy, and was therefore brutally murdered. As far as is known at present, no arrests have been made.

Captain FOXCROFT: 57.
asked the Chief Secretary, approximately, what number of murders have been committed by rebels in Ireland since July, 1920; and what number of the military, Royal Irish Constabulary, and auxiliary cadets, respectively, have been found guilty of murder or are at present being tried on charges of murder in Ireland, during the same period?

Sir H. GREENWOOD: The murders committed by rebels since July, 1920, are 568 in number. This total comprises 310 police, 124 military, and 134 civilians. Members of the Crown forces found guilty of murder during the same period are:


Military
None


Royal Irish Constabulary
1


Auxiliary Cadets
1


The former was executed on the 7th instant, while the latter was found by the Court to be insane at the time he committed the murder. One member of the military forces and four of the Royal Irish Constabulary are at present undergoing trial for murder.

Lieut.-Colonel CROFT: Is the right hon. Gentleman aware of the fact that there has been an enormous increase in the last
five months of civilian murders of innocent persons who are loyalists, and who have no connection whatever with any of the forces of the Crown; and, in view of that fact, cannot the right hon. Gentleman suggest any new policy which is going to stamp out this crime?

Mr. SPEAKER: The question on the Paper asks for certain figures. We cannot have an argument on the figures.

SHOOTINGS.

Major BARNES: 28.
asked the Prime Minister whether, in view of the statement of General Crozier that a report was received by him from an officer who was present at the shooting at Croke Park and forwarded to the proper authority, he will cause searching investigations to be made as to why this report was not put before the Court of Inquiry into this case?

Sir H. GREENWOOD: This report was received, but was not produced at the Court of Inquiry, as the officer who rendered it was himself examined as a witness before the Court.

Mr. RENDALL: 58.
asked the Chief Secretary whether an inquiry has been held into the death of John Sheehan, of Collee, Listowel, stated to have been shot dead by members of the Crown forces on the 25th May; and what is its finding?

Sir H. GREENWOOD: I am still awaiting a report from the Commander-in-Chief in this case.

Mr. T. THOMSON: 64.
asked the Chief Secretary whether a prisoner named Patrick White was shot dead at the internment camp at Spike Island, Queens-town, on the 1st June; and what was the reason for this shooting?

Sir H. GREENWOOD: This refers to the martial law area, and I have asked the Commander-in-Chief for a report. I shall be glad if the hon. Member will postpone his question to a later date.

Mr. WINTRINGHAM: 68.
asked the Chief Secretary whether he is aware that two men named Patrick and James Ryan were taken from their beds in their house at Knockfune, County Tipperary, on the 7th June, and shot, Patrick being killed and James wounded; and that their house was then set on fire and destroyed; and whether the perpetrators of this outrage have yet been traced?

Sir H. GREENWOOD: This refers to the martial law area. I have asked the Commander-in-Chief for a Report, and I shall be glad if the hon. Member will postpone his question, of which I only received notice on Tuesday, to one day next week.

Mr. MacVEAGH: Is it a fact that murders took place in Ireland under circumstances such as this—nearly two months ago—and that they have not yet been officially reported at headquarters?

Sir H. GREENWOOD: Every murder, every incident, every outrage, is reported to me; but when an hon. Member puts a question on the Paper I endeavour to get as specific and detailed report as possible for that hon. Member.

Mr. MacVEAGH: Seeing the time that often elapses after the event, could the right hon. Gentleman give the House immediately the official report he received at the time, and say that if further inquiry is desired he will make it?

Sir H. GREENWOOD: That would not cover the various points in the question. These questions are put down, I presume, to elicit the fullest details of any given incident or outrage. I am anxious, only too anxious, to give the fullest possible answer.

Mr. MacVEAGH: Can the Chief Secretary tell us how it is that in connection with these questions about the martial law area he gives a stereotyped reply, no matter how long the time that has intervened, to the effect that, "This is in the martial law area and I am causing inquiries to be made." If he got a report at the time, why does he not publish it?

Mr. SPEAKER: A complaint is frequently made that the actual question on the Paper is not answered.

Mr. MacVEAGH: The truth is that he has not got an answer.

DESTRUCTION OF SHOPS, KILDORRERY.

Mr. GALBRAITH: 21.
asked the Chief Secretary whether an inquiry has been held into the alleged wrecking and looting by police of Kildorrery, County Cork, on the 8th August, 1920; and whether any arrests have been made?

Sir H. GREENWOOD: Some shops in the village of Kildorrery were wrecked on the night of 8th August last following the murder of a policeman, but no evidence has been forthcoming which would justify the arrest of any member of the Crown forces in connection with the destruction.

MILITAEY OPEEATIONS.

Mr. GALBRAITH: 22.
asked the Chief Secretory whether a young man named Boland, of Ballyhaunis, who had been on the run for some months, was shot dead by members of the Crown forces on 27th May; and whether an inquiry has been held into his death and with what result?

Sir H. GREENWOOD: This man was chased and captured by Crown forces during a search for rebels at Crossard. While being led away under escort he made a determined attempt to escape. He ignored repeated commands to halt and was consequently fired at with fatal results. The Court of Inquiry found that he met his death by a bullet wound fired by Crown forces in the execution of their duty. Boland was identified by the police as a captain in the Crossard Company of the Irish Republican Army. He is believed to have taken a leading part in an ambush in this neighbourhood and to have been implicated in the attempted murder of a constable.

Mr. BRIANT: 25.
asked the Prime Minister whether any estimate of the cost of the operations in Ireland has been presented to the Cabinet; and, if so, whether Supplementary Estimates will be presented?

Mr. CHAMBERLAIN (Leader of the House): Supplementary estimates will be presented if required, but it is impossible at present to forecast the rate of expenditure for the rest of the year.

Captain BENN: Does the right hon. Gentleman anticipate that a Supplementary Estimate will be required?

Mr. CHAMBERLAIN: I am not yet in a position to anticipate.

Captain W. BENN: 54.
asked the Chief Secretary if he is aware that among the property destroyed or looted at Ennis on 19th April, in revenge for the murder of Sergeant Rue on 16th April, was the whole of the contents of the Old Ground Hotel, including personal effects, food,
money, paintings, a piano, and the effects of lodgers at the hotel; that the occupiers are Mrs. Jane McNamara, widow, aged 85 years, and quite blind, Mrs. Francis O'Conor, widow, and her daughter Miss Oonagh O'Conor, aged 20; that these women have no male relatives living and take no part in politics; and what reason is alleged by the military governor for the singling out of these persons for punishment?

Sir H. GREENWOOD: This hotel was one of those referred to in my reply to the hon. Member for Leyton West (Mr. Newbould) on 5th May, but I have asked the Commander-in-Chief for a more detailed report in this case.

Captain BENN: Is it a fact that members of the Crown forces can go about stealing food, money, pianos, and paintings in April, and the right hon. Gentleman in June is asking someone for a report?

Sir H. GREENWOOD: No; the allegations are made by the hon. and gallant Gentleman, not by me.

Captain BENN: Is it not a fact that these helpless women were robbed in April, and the Chief Secretary in June is yet making inquiries?

Lord H. CAVENDISH-BENTINCK: 72.
asked the Chief Secretary whether he has yet consulted with the military authorities as to the advisability of discontinuing official reprisals in the martial law area: and whether any decision has been reached?

Sir H. GREENWOOD: I would refer the Noble Lord to my reply to a similar question by my hon. and gallant Friend the Member for Bury St. Edmunds on the 13th instant.

Mr. WATERSON: (by Private Notice) asked the Chief Secretary whether he is aware that the Lombardstown Creamery, Cork, has been closed by a military order signed by Colonel Willis, Kerry Brigade, Buttevant; whether this creamery deals with a milk supply of over 6,000 gallons daily, and no other machinery is available in neighbouring creameries to deal with such a large supply; whether the order to close the creamery was given with the consent of His Majesty's Government; and, if so, upon what grounds?

Sir H. GREENWOOD: The Commander-in-Chief informs me that this creamery has been closed from 15th June
to 29th June. The grounds upon which such punishments are imposed by the military authorities were fully dealt with in my reply to a Private Notice question by the hon. Member for Leith on 30th May, in which I said:
It has been decided to close a limited number of creameries in the martial law area in localities where outrages have been frequent and where road cutting and other forms of sabotage are prevalent, and where other punishments and restrictions have not had the desired effect. The number of creameries to be closed in any one area is at present limited to three. Military governors who adopt this form of punishment are instructed to announce publicly by means of Proclamations or through the local Press the reason why each creamery is closed and the duration of the closure. In regard to the last part of the question, these measures are not taken against specific individuals, but are intended to bring home to the inhabitants of the locality generally their responsibility for outrages committed with their knowledge and connivance."—[OFFICIAL REPORT, 30th May, 1921; col. 583, Vol. 142.]
No one regrets more than I do the necessity for these measures, but they have been decided upon by the Commander-in-Chief, who has the complete confidence and full support of the Government in his difficult task.

Mr. WATERSON: Can the right hon. Gentleman say whether these orders for the closing down of these creameries are executed, in many cases, summarily and without due notice; and, seeing that there are large stocks of perishable goods, such as butter and cheese, and valuable foodstuffs being wantonly destroyed, can he not see his way to give sufficient notice, in order that these people may remove these perishable goods?

Lord H. CAVENDISH BENTINCK: Before the right hon. Gentleman answers that question, will he explain to the House how the inhabitants who are unarmed can prevent outrages committed by armed people, and why they should be punished by the shutting up of their creameries? That is a sensible question, is it not?

Sir H. GREENWOOD: As to the specific point raised by the hon. Member (Mr. Waterson), I cannot say whether reasonable notice was given or not, but I will make inquiries.

Captain W. BENN: Can the right hon. Gentleman say, when he is inflicting punishment on the people of Ireland, that he will avoid inflicting punishment on babies who require milk?

OUTRAGES.

Mr. C. WHITE: 24.
asked the Chief Secretary whether an inquiry has been held into the alleged wrecking by the police of many houses at Castlerea, County Roscommon, on the 2nd August last; and whether any punishments have been inflicted?

Sir H. GREENWOOD: I have made inquiry into these allegations and I find that they have no foundation whatever. There was no case of wrecking in Castlerea on or about the date mentioned. The police report that the houses of four loyalist farmers were fired into on 23rd August by Sinn Feiners and their windows were broken. On 29th August the vacated police barrack at Loughglinn was maliciously burned. Perhaps the hon. Member refers to these outrages. I should be glad to know on what he has based the untrue allegation against the police in his question.

Mr. WHITE: How has it been found out that they were Sinn Feiners who fired these shots, and have they been punished or arrested for doing so?

Sir H. GREENWOOD: That does not arise out of the hon. Member's question.

Captain W. BENN: It arises out of your answer.

Sir H. GREENWOOD: The question refers to the "alleged wrecking by the police of many houses at Castlerea." I have said there was no such wrecking. I am endeavouring to assist the hon. Member to elucidate what I am sure he wants, the truth in reference to these allegations, and I have described to him some of the outrages in that part of the country in the month of August.

Mr. MacVEAGH: The right hon. Gentleman quoted an attack which was made, he said, by Sinn Feiners. My hon. Friend has asked a question. Can we have an answer? If the right hon. Gentleman knows this was done by Sinn Feiners has he prosecuted them?

Colonel ASHLEY: Is it likely the Crown forces would attack a police barracks.

Sir H. GREENWOOD: I agree with the hon. and gallant Gentleman who has asked the last supplementary question. I have already said the police reported that the houses of four loyalist farmers were fired into on 23rd August by Sinn Feiners and their windows broken.

Mr. WHITE: Have they been prosecuted or punished in any way for doing that?

Sir H. GREENWOOD: The hon. Member will share my regret that we have not yet been able to arrest them.

Mr. WHITE: How do you arrive at the fact that they were Sinn Feiners?

Mr. MacVEAGH: How do you know they were Sinn Feiners, when you do not know who they were?

Mr. C. WHITE: 45.
asked the Chief Secretary whether an inquiry has been held and any arrests made in connection with the sacking by police of Inniscarra, County Cork, on 2nd September last?

Sir H. GREENWOOD: A licensed house in Inniscarra was broken into and wrecked on 1st September last year. The occupant's wife alleged that the damage was committed by soldiers. The Commander-in-Chief informs me that this allegation was fully enquired into at the time, but no evidence was forthcoming on which any offenders could be traced and no arrests were made. I have no report of any destruction at Inniscarra on the date mentioned in the question.

Sir W. BARTON: 67.
asked the Chief Secretary whether a Court of Inquiry has yet been held into the attack on four members of the staff of the "Cork Examiner" on 23rd May last; and, if so, what is its finding?

Sir H. GREENWOOD: One of the four men subjected to this murderous attack at 3 a.m. on the 23rd May died some hours later, and the Court of Inquiry in lieu of inquest found that he was killed by a bomb thrown by some person unknown who was thereby guilty of wilful murder. I am informed that another member of the party was dangerously wounded. The "Cork Examiner" newspaper is under the Sinn Fein ban for some time owing to its efforts towards securing peace in Ireland. Some months ago an attempt was made to burn the office and wreck the machinery. The attack on the employés is part of the campaign to cripple the paper by frightening the employés from working. It was a most dastardly outrage on four inoffensive persons who were merely earning their livelihood and indicates the extent to which extremists are prepared to go. Portions of the bomb were found by the
police at the scene. It is of the familiar type of home-made Sinn Fein bombs. There were no persons about at the time of the explosion except the four mentioned and no particulars can be got from any other persons. The locality where the bomb was thrown is a bad one and a regular haunt of the Cork gunmen. It is receiving special attention from the police.

Mr. J. JONES: Is the right hon. Gentleman aware that this paper was suppressed by himself in the early days of this campaign?

Sir H. GREENWOOD: No, I am not aware of that. Further, I am not aware that the statement is true.

Mr. JONES: It is true, I am aware that it is true. The "Cork Examiner" was suspended. I was in Cork at the time.

HON. MEMBERS: "Order, order!"

Mr. SPEAKER: The hon. Gentleman is not entitled to make a statement.

Mr. T. P. O'CONNOR: I cannot recall whether it was during the time of the right hon. Gentleman or the time of his predecessor, but is it not a fact that this paper was suppressed?

Sir H. GREENWOOD: I want to be perfectly precise on this point. The allegation of the hon. Member for Silver-town in his supplementary question was that I had suppressed this paper—

Mr. JONES: No, no! That your Government have done so.

Mr. SPEAKER: All this is irrelevant to the question on the Paper.

Mr. MacVEAGH: We can blame either you or Macpherson.

Mr. JONES: They sub-let their responsibility!

OUTRAGES (GREAT BRITAIN).

Sir J. BUTCHER: 26.
asked the Prime Minister whether, in view of the large and increasing number of serious outrages committed in Great Britain by Sinn Feiners coming from Ireland, he will establish a passport system which will control and prevent the passage of undesirables from Ireland into Great Britain?

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Shortt): I have no power under the existing law to
prevent a British subject landing in Great Britain from Ireland without a passport; and even if Parliament were willing to confer the power it would be difficult to enforce effectively a system of passports in respect of all the means of transit available by regular routes and otherwise between Ireland and Great Britain. As I stated in reply to the hon. and gallant Member for Rotherham on the 7th instant, special steps are already taken to discover assassins and other undesirables coming from Ireland.

Sir J. BUTCHER: Is the right hon. Gentleman satisfied that he has an effective method of preventing these assassins and other undesirables from coming over to England and perpetuating Sinn Fein outrages?

Mr. SHORTT: I do not know what my hon. Friend means by "effective." No system is perfect, but we are doing our best.

Colonel Sir C. YATE: Why not blockade the whole of Ireland, and allow nobody to come over? Why not ship the whole lot who are here over there?

Sir J. BUTCHER: Could it not be more effectively carried out than it is under the existing system?

Mr. MacVEAGH: All the undesirables do not come from Ireland. Some come from the north of England.

COMPENSATION.

Captain W. BENN: 27.
asked the Prime Minister whether a decision has yet been come to with reference to compensation to innocent victims of reprisals?

Sir H. GREENWOOD: I have nothing at present to add to the reply which the Prime Minister gave to a previous similar question by the hon. and gallant Member on the 2nd June.

Captain BENN: Can the right hon. Gentleman say when it is anticipated the decision will be arrived at?

Sir H. GREENWOOD: It is quite impossible to fix a date for this most important decision.

Major MACKENZIE WOOD: Is the right hon. Gentleman still prepared to burn houses without proof of guilt.

Sir H. GREENWOOD: No.

Mr. WHITE: Will the right hon. Gentleman withdraw the Proclamation that was issued in Listowel?

Mr. SPEAKER: That does not arise out of the question on the Paper.

AUXILIARY POLICE, COUNTY WATERFORD.

Mr. MacVEAGH: 29.
asked the Prime Minister whether he has received the copies sent to him of the affidavits by Mrs. Bridget Fahy, of Abbeyside, Dungarvan, and Miss Bridget O'Neill, of Kilnafrehan, County Waterford, as to looting and overtures and acts of indecency by Black and Tans at Mrs. Fahy's premises on 3rd April; whether he is aware that these ladies attended at the police barracks and identified one of the men concerned; whether he has ascertained why this man has not been prosecuted; whether he is aware that, as a reprisal for the identification, the police returned in the middle of the night on 14th April and wrecked and burned the shop and house, destroyed furniture, stock, and effects, stole money, and left the lady homeless and penniless, the only occupants of the house being these two ladies and a child of six years; whether any action was taken by him on receipt of the affidavits; and, if so, with what result?

Sir H. GREENWOOD: I have received these affidavits, and the allegations are now being investigated by the Commander-in-Chief in Ireland.

Mr. MacVEAGH: Does the answer of the Chief Secretary mean that he has received them, or that the Prime Minister has received them?

Sir H. GREENWOOD: Everything sent to the Prime Minister concerning Ireland comes to me.

Mr. MacVEAGH: Oh, dear!

Captain BENN: Can the right hon. Gentleman say why it has taken over two months to investigate a series of charges of this kind?

Sir H. GREENWOOD: I am not aware that it has taken over two months to investigate the series of charges. As soon as the affidavits came to me they were sent to the only officer who could inquire into them, namely, the Commander-in-Chief. There was some delay in my receiving them, because of the unnecessary circumlocution of sending them to the Prime Minister first.

Captain BENN: Does not the right hon. Gentleman recognise that these events are
said to have occurred in April? Why has no inquiry been held?

Mr. MacVEAGH: I would like an answer to my question as to whether these ladies attended at the police barracks and identified one of the men concerned, and also as to why this man has not been prosecuted during the intervening two months?

Sir H. GREENWOOD: I have fully answered that. There are questions involved in the allegations contained in the affidavits which, as I have stated, are being inquired into.

Mr. MacVEAGH: Does the right hon. Gentleman say this question was never reported to him until he got the sworn affidavits?

Sir H. GREENWOOD: I have answered the question.

Mr. SPEAKER: The hon. Member put down a question referring to certain statements in affidavits. Inquiry naturally follows upon the allegations, and the hon. Member has been asked to await the result of the inquiry.

Mr. MacVEAGH: Surely I am entitled to an answer to a specific question upon the Paper, namely, whether the policeman who was identified has been prosecuted and, if not, why not?

Mr. SPEAKER: If the hon. Member wishes to detach any part of the question from the part relating to the affidavits, he should put down a separate question.

WOUNDING, THURLES.

Mr. RENDALL: 49.
asked the Chief Secretary what report he has received as regards the wounding of John Mase, a boy aged four, at Thurles, County Tipperary, on the 10th April?

Sir H. GREENWOOD: This refers to the martial law area, and I have asked the Commander-in-Chief for a report. Perhaps the hon. Member will put his question down again next week.

LOOTING, TRIM.

Major M. WOOD: 51.
asked the Chief Secretary whether Captain MacFie, late adjutant of the Auxiliary Division, Royal Irish Constabulary, was called as a witness at the trial of the cadets alleged to be implicated in the looting at Trim; and whether any statement was obtained from him before the trial?

Sir H. GREENWOOD: On the 18th March last an official letter was sent by the Irish Office to Captain MacFie at his last known address in the following terms:
In order that the fullest possible information may be obtained in regard to the looting in Trim by members of N Company of the Auxiliary Division of the Royal Irish Constabulary the Irish Government are anxious to obtain a Summary of Evidence both from Brigadier-General Crozier and from yourself. I have therefore to request that you will be good enough to inform me that you will hold yourself in readiness to give that evidence at an early date.
No reply was ever received to this letter. It is understood that Captain MacFie is abroad, but his exact whereabouts are not known.

Major WOOD: 52.
asked the Chief Secretary whether he has seen a statement by General Crozier that he was never present at the taking of a summary of evidence against the cadets accused of complicity in the Trim looting; that he was asked to attend at the taking of such a summary on 23rd March, but found on his arrival that this was not a summary of evidence, since the accused were not present; that he found that he was merely called in to assist the military by throwing light on missing documents and exhibits, but was unable to state what had become of them since his first investigation of the case; that, on this occasion, he signed a statement to the effect that certain important documents and exhibits were then missing; and whether this statement is still in existence.

Sir H. GREENWOOD: A statement of the evidence which could have been given by General Crozier was taken. It could have been used in evidence. General Crozier was subpoenaed to give evidence at this trial but forwarded a medical certificate to the effect that his health was such that he could not travel to Dublin.

Major WOOD: Why did the right hon. Gentleman say a summary of evidence was taken, when, according to the definition of a summary of evidence, that was not the fact? Is he aware that a summary of evidence must be taken in the presence of the accused and that therefore no summary of evidence was taken at all? May I have an answer?

Mr. SPEAKER: The question on the Paper contains the phrase, "a summary of evidence," and that accounts for the nature of the reply.

Major WOOD: "A summary of evidence" was the term used by the right hon. Gentleman in answer to the previous question, and that is a term used in the Manual of Military Law. May I now have an answer to my question?

Sir H. GREENWOOD: I accept the definition of the Manual of Military Law.

Major WOOD: Then, why is it the right hon. Gentleman says that a summary of evidence was taken when, according to the definition, it was not taken, because none of the accused were there?

Sir H. GREENWOOD: I have en deavoured to answer the question. I say that a statement of the evidence that could have been given by General Crozier was taken. That is my answer. General Crozier also was subpoenaed to give evidence at the trial.

Major WOOD: Why did the right hon. Gentleman say "a summary of evidence" before?

Mr. SPEAKER: In the right hon. Gentleman's answer now he uses the term "statement of evidence."

Major WOOD: May I ask why he changes it now when he is found out?

Mr. MacVEAGH: He cooked the answer.

Major M. WOOD: 53.
asked the Chief Secretary whether he is aware that during March the evidence and documents relating to the Trim looting were handed over by the police to the military authorities for investigation; that these were returned to the police on 23rd or 24th March with a statement that they were now useless owing to loss and deterioration of evidence; that Major Wake, of the Auxiliary Division, proceeded to Trim on 24th March and obtained further evidence; whether he was immediately after called on to resign; and whether the evidence taken by him was used at the trial and himself called as a witness?

Sir H. GREENWOOD: The evidence relating to the Trim case was handed over to the military authorities by the police, and was returned when no longer required. It was not accompanied by any statement such as that alleged. As regards the rest of the question, I would
refer the hon. and gallant Member to the replies I gave to the hon. and gallant Member for Newcastle, East (Major Barnes), on 2nd June and 9th June.

TRADE DISPUTE, DUBLIN.

Mr. MYERS: 62.
asked the Chief Secretary whether he is aware that for some weeks there has been a trade dispute at the works of Messrs. Barret and Company, Westland Row, Dublin; that a strike picket has been on duty outside the premises since the beginning of the dispute, and that no question has arisen as to the conduct of this picket; that on 3th May an armed military car drove up, and the officer in charge ordered the picket away, stating that they could not be allowed to loiter there; that the officer was informed that a trade dispute was in progress and that they were the strike picket; that the officer replied with an expletive against the strike and again ordered the picket off; and whether he will have inquiries made into this matter and give instructions against any further interference with the legitimate right of dispute?

Sir H. GREENWOOD: Under the powers conferred on him by the Restoration of Order in Ireland Regulations, the Competent Military Authority of the Dublin District has issued an Order making it an offence to stand or loiter in any public place. The action of the strike picket contravened this Order, and they were accordingly requested to disperse. The military authorities have no desire whatever to interfere in any trade dispute, but the methods of the rebels in cloaking their murderous intentions under the guise of ordinary civil occupations is well known, and I am afraid that the curtailment of privileges of this nature is in present circumstances unavoidable.

Mr. MYERS: To the category of crimes, of which it is asserted the military forces of the Crown are guilty, have we now to add the intimidation of workmen?

BURNINGS AND LOOTINGS.

Mr. CHARLES WHITE: 66.
asked the Chief Secretary how many members of the Crown forces have been punished for the burning or looting of houses and other buildings during reprisals which occurred between July and December, 1920?

Sir H. GREENWOOD: No members of the Crown forces have been punished for such offences.

Mr. WHITE: May I ask how it is the right hon. Gentleman said, on 9th June, that action is always taken against persons responsible for unauthorised reprisals? Does he deny that reprisals have taken place?

Sir H. GREENWOOD: I have answered the question.

Captain BENN: Does the right hon. Gentleman say that none of the persons whom he describes as guilty of murder has been brought to book by his Department —his own men?

Sir H. GREENWOOD: I have answered that question.

COURT OF INQUIRY (CASTLECONNELL).

Lord H. CAVENDISH-BENTINCK: 71.
asked the Chief Secretary whether he will state the findings of the Court of Inquiry into the affray between two parties of police at Castleconnell, during which two policemen and one civilian were killed?

Sir H. GREENWOOD: I will circulate in the Official Report the findings of the Court, which, I may add, were given by my Noble Friend the Lord Chancellor in another place on the 5th ultimo.

The findings of the Court were as follow:

"(1) That the detachment of G Company, Auxiliary Division, Royal Irish Constabulary, was engaged in a legitimate and properly organised operation.
(2) That the orders issued by Captain and 2/D.I. W. P. Wood were so framed as to show the intention of avoiding unnecessary bloodshed.
(3) That the firts shot was fired by the police.
(4) That the two civilians who were first captured and also Constable Talbot were not ill-treated.
(5) That considerable excitement prevailed; that the fact that Constable Talbot, who remained with the party in the passage who had accepted his surrender, was not injured shows that there was no intention of any unauthorised shooting. That there were other Auxiliaries in the yard who had not seen what had occurred in the passage and who fired not knowing the circumstances, and that Mr. O'Donovan and Constable Morrison were wounded by this firing.
(6) That Captain and 2/D.I. Wood gave the orders to cease fire as soon as he knew that Constable Talbot had surrendered, and that this order was obeyed.
589
(7) That proper precautions were taken to protect Mr. and Miss O'Donovan and the female employés of the hotel.
(8) That the Court are of opinion that whilst the evidence of Miss Margaret Wade was given in good faith she can only have had a partial view of what occurred and was mistaken in saying that she saw Mr. O'Donovan and Constable Talbot together. On this point the evidence of the two constables is conclusive.
(9) That the statement which appeared in the Press to the effect that 'the Auxiliaries returned, accused Mr. O'Donovan of har bouring rebels,' took him out, and shot him, was incorrect and was entirely unjustified, and is further disproved by the position of the wounds.
(10) The Court find—

(a) That the deceased Denis O'Donovan, male, aged 46, married, agent for Murphy's Brewery, was residing at the Shannon Hotel, Castleconnell, at the time of his death. That the deceased Donald Pringle, male, aged 31, single, cadet, Auxiliary Division, Royal Irish Constabulary, was residing at Lakeside Hotel, Killaloe, at the time of his death. That the deceased William John Hughes, male, aged about 45, married, Sergeant, Royal Irish Constabulary, was residing at the police barracks, Newport, at the time of his death.
(b) That all the deceased died at about 20.00 hours on the 17th April, 1921, at Castleconnell, County Limerick.
(c) That the cause of death in each case was shock and hæmorrhage following gunshot wounds. That the deceased died after receiving the wounds.
(d)That the shots which caused the wounds were fired in the case of Denis O'Donovan and William John Hughes by a party of 'G' Company, Auxiliary Division, Royal Irish Constabulary, and in the case of Donald Pringle, by a party of Royal Irish Constabulary; that the shots were fired during an encounter between two parties of Crown forces at Castleconnell, County Limerick, on 17th April, 1921. That the encounter occurred through each party mistaking the others for armed civilians."

Captain BENN: Were all the material witnesses in this case called?

Sir H. GREENWOOD: The hon. and gallant Gentleman can judge of the Court from its findings.

TRIAL (BALLYMACELLIGOTT).

The following question stood on the Paper in the name of Mr. LAWSON:

73. To ask the Chief Secretary the result of the trial of five men named O'Connor, Dowling, Carmody, Herlihy, and McEllistrum charged with taking part in an
attack on the police at Ballymacelligott, County Kerry, on 12th November last; and whether these men are at present in prison?

Sir H. GREENWOOD: I shall be glad if the hon. Gentleman will postpone this question.

Mr. LAWSON: Yes, I have no objection to that, but I think I ought to point out that the question was put down a week ago. The thing happened last November, the arrested men were tried a couple of months ago, and I think the right hon. Gentleman might have some information now to give to the House.

Sir H. GREENWOOD: Let me just set out upon what I am endeavouring to do. When a specific question dealing with specific names, places, dates, and events is put on the Paper, I am bound to refer it to the proper officer—in this case the Commander-in-Chief—responsible for the martial-law area for an answer. I must do it, in fairness to him, and in view of my desire to give the hon. Member the fullest information I can obtain.

ALLEGED THEFT, BALLYMACELLIGOTT.

Mr. LAWSON: 74.
asked the Chief Secretary what is the result of the inquiries into the alleged theft last November by members of the Crown forces of property belonging to Nurse Dowling, of Ballymacelligott; and whether any compensation has been paid to her?

Sir H. GREENWOOD: No order was issued to search the premises where Nurse Dowling resided at the time in question, and no police are known to have entered the premises on that date. Investigations in this matter are still being pursued, but unless further facts come to light there is no ground for paying any compensation from the public funds.

Mr. LAWSON: Is the right hon. Gentleman aware that this lady gave very great service during the War, and that the lost £100 worth of notes and property that were taken while the forces of the Crown were on the premises; that they were known to have entered the premises—there is plenty of evidence to that effect?

Sir H. GREENWOOD: I profoundly regret that anybody should lose money— or their lives—in Ireland; but this case has been inquired into, and unless I have
justification for it I have no right to spend money voted by this House to anybody, however hard the case may be.

Mr. LAWSON: May I ask, in view of the attention that has been called to this, the Ballymacelligott incident, which was, I think, a serious affair, whether the right hon. Gentleman will go into the whole of the facts of the case and give a clear, frank report to the House about it?

Mr. WATERSON: Will the right hon. Gentleman be prepared to see that a verbatim report of the trial is laid upon the Table of the House?

Mr. STANTON: Is it not, Sir, a breach of the privileges of the House that hon. Members should put inspired and primed questions, about the circumstances of many of which they know nothing?

Mr. J. JONES: There is a Member with the halo!

Mr. STANTON: You go before your people with these stories.

Mr. SPEAKER: There is no question of privilege.

Mr. LAWSON: Is the right hon. Gentleman aware that this is not an inspired question; some of us have visited the very place, and evidence was taken on the spot?

Sir H. GREENWOOD: Let me be responsible only for what I am responsible. [An HON. MEMBER: "That is quite enough."] The question deals with Nurse Dowling, and it is a very hard case, but in my answer I say there is no grounds for paying any compensation out of public funds. What I shall do is: I shall consider if it is possible—if the nurse has a good case—to contribute out of any other funds. I shall do that. It is impossible for a Minister to spend public money except on the authority of those who advise him.

Captain BENN: What does the right hon. Gentleman mean when he says: "If the nurse has a good case?"

Mr. STANTON: On a point of Order, Mr. Speaker—

Mr. SPEAKER: Mr. MacVeagh.

The following question stood on the Paper in the name of Mr. MacVeagh:

75. To ask the Chief Secretary if his attention has been called to the official statement issued on 9th May from Dublin Castle for insertion in the newspapers to the effect that Newcastle, County Down, police barracks had been attacked at 2.30 that morning, and that the attack lasted until 5 a.m. when the rebels were driven off; has he since been informed that the force of rebels consisted of one local Tory who had gone mad, and who is now in a lunatic asylum; on whose authority was the story of the heroic defence of Newcastle barracks against the rebel army circulated, and has it since been publicly withdrawn; and, as the local telegraph office was not open until three hours after the facts had been known, can he state if the account came from any local police officer or whether it was composed in Dublin Castle?

Sir H. GREENWOOD: The statement in question—[Interruption].

Mr. MacVEAGH: Order! I want to hear the Chief Secretary tell us about these men.

Mr. STANTON: We do not want to listen to you.

Mr. SPEAKER: It is impossible to get information if hon. Members on this side are abusing their right. I hope they will be prepared to listen without interruption, for one interruption leads to another.

Sir H. GREENWOOD: The statement in question was officially issued to the Press exactly in the form in which it was received from the local police. It subsequently transpired that the disturbance which the sergeant in charge of the police barracks in the small hours of the morning took to be an attack was in fact merely due to the action of an unfortunate individual who had mounted to the roof of a neighbouring temperance hotel, and proceeded to dismantle it by pulling off the tiles and throwing them on to the road. The true story quickly became known, and received adequate publicity. The sergeant who submitted this report without satisfying himself of the facts has been suitably dealt with.

Mr. MacVEAGH: Is the right hon. Gentleman aware that the report inserted in the newspapers was circulated as it was received from the local police; and
are we to understand that the sergeant of police, after dealing with this mad Tory and getting him put into a lunatic asylum, reported to Dublin Castle as follows:
I was attacked by a band of rebels, and I gallantly defended the barracks for four hours and they retired. I had no casualties.
That is a fine cock-and-bull story you have let out.

DEATH SENTENCE (J. J. EGAN).

Mr. T. P. O'CONNOR: (by Private Notice) asked the Chief Secretary for Ireland if the Government will give an assurance that in the case of John Joseph Egan, of Ennis, County Clare, who has been sentenced to death and for whom a writ of Habeas Corpus has been granted, the sentence will not be carried out until the proceedings before the judge who granted the writ have concluded.

Sir H. GREENWOOD: I am informed that a conditional Order for a writ of Habeas Corpus has been granted in the case of John Joseph Egan, convicted for being in possession of ammunition in the martial-law area. The final decision in this case will not be taken pending an appeal now before the House of Lords in a similar case.

GREECE AND TURKEY.

Captain Viscount CURZON: 30.
asked the Prime Minister whether British naval and military officers are attached to the Greek forces; whether ships loaded with munitions proceeding from Soviet Russia to the Turks were recently sunk by Greek warships at Batum; and whether he can state that no assistance whatever in men, money, or material will be afforded to the Greek forces?

Mr. CHAMBERLAIN: Apart from the British Naval Mission to Greece, there are no British naval officers attached to the Greek forces. Three or four British military officers are sent as liaison officers from Constantinople to the Greek, army in Anatolia whenever the General Officer Commanding-in-Chief at Constantinople considers such attachment desirable. At the present time the British military attaché from Athens is visiting the front at the invitation of the Greek Government. No British officers are serving with the Greek army. No information
has been received as to any sinking of munition ships by the Greeks at Batum. In answer to the last part of the question, as has been repeatedly stated, no such assistance is being given to the Greek forces. But equally no Government could be expected to give such a categorical, though indefinite, undertaking as that suggested in the concluding sentence of the question on the Paper.

Viscount CURZON: Do, I understand the right hon. Gentleman to say we have no naval representative with the Greek naval forces in the Black Sea, and have no direct information as to what exactly is being done?

Mr. CHAMBERLAIN: I do not quite know where members of the British Naval Mission in Greece may be at this moment. Apart from them, there are no other naval officers there.

Mr. A. HERBERT: How is it there are any Greek naval forces at all in the Black Sea, when the Dardanelles has been neutralised?

Mr. ORMSBY-GORE: Will the right hon. Gentleman consider the advisability of sending instructions to the British Commander-in-Chief at Constantinople, urging that a certain number of British officers should be sent to the theatre of war to see exactly what is taking place?

Mr. CHAMBERLAIN: I have stated that officers are sent by the General Officer Commanding in Constantinople as he considers desirable. I think we may trust this matter to his discretion.

Lord R. CECIL: Will the right hon. Gentleman consider the desirability, quite apart from military considerations, of satisfying the great anxiety which exists in this country as to what is really going on?

Mr. ORMSBY-GORE: Will the right hon. Gentleman also consider sending instructions, and not leaving it to one officer to deal with the Imperial aspect of this matter?

Mr. CHAMBERLAIN: This is not a matter primarily within my immediate sphere, but I am quite certain that my Noble Friend the Secretary of State for Foreign Affairs and the British military and naval authorities will get whatever information is open to them if they think
it material for the purposes of His Majesty's Government. If they have left it to the discretion of the local officer it is doubtless because they are satisfied with the way in which he is exercising that discretion.

Viscount CURZON: Could the Leader of the House assure us that before any assistance is given in men, money, or materials to the Greek Army the House of Commons will have a chance to say "Yes" or "No"?

Mr. CHAMBERLAIN: No. I cannot give assurances of that kind, which would mean limiting the discretionary power of the Executive in a way in which it has never been limited and might greatly hamper the prosecution of British interests.

Mr. A. HERBERT: 37.
asked the Prime Minister if he is aware that Greek troops under General Leonardopoulos, of the 10th Division, have massacred 5,500 out of a population of 7,000 defenceless Turkish men, women, and children in the district of Yalova, which district is on the Sea of Marmora, three hours distant from Constantinople; and if His Majesty's Government has any information upon this question?

Mr. CHAMBERLAIN: As the hon. and gallant Member for Hull (Lieut.-Commander Kenworthy) was informed on 8th June, the information furnished to His Majesty's Government by the Allied Commission appointed to report was to the effect that grave excesses had occurred in the district referred to, but we have received no confirmation of the actual figures quoted by my hon. Friend.

Mr. HERBERT: If His Majesty's Government was really and sincerely anxious to obtain information, could it not be easily obtained either from our military or naval authorities or from the Embassy; and is it not very damaging indeed to our reputation that these allegations of the massacre of 5,000 unarmed people in a non-combatant zone by a Government that was lately an ally of ours should be made in this way?

Mr. SPEAKER: That does not arise out of the question on the Paper.

Sir H. BRITTAIN: 43.
asked the Prime Minister whether, in the event of its being found impossible to bring to a peaceful
conclusion the present dispute between Turkey and Greece, he can assure the House that there is no intention of allowing British forces to take part on either side?

Mr. CHAMBERLAIN: His Majesty's Government, who desire only the early re-establishment of peace, are of course anxious to avoid all military intervention; but it is impossible for them or for any Government to fetter their future discretion by making categorical declarations with regard to hypothetical conditions.

MINISTER WITHOUT PORTFOLIO.

Major C. LOWTHER: 35.
asked the Prime Minister how many appointments of Ministers without Portfolio have been made since 1900; and how many Ministers so appointed received salaries?

Mr. CHAMBERLAIN: Since 1900 10 appointments of Ministers without Portfolio have been made. Eight Ministers so appointed received salaries.

Major LOWTHER: Would the right hon. Gentleman tell me whether there is any truth in the report that the present Minister without Portfolio has resigned?

Mr. CHAMBERLAIN: That does not appear to arise out of the question on the Paper, but I think it was denied by my right hon. Friend yesterday.

Major LOWTHER: 36.
asked the Prime Minister whether the appointment of Minister without Portfolio lapsed when the right hon. Baronet the Member for Colchester was appointed Secretary of State for War; how long was the interval which elapsed before the right hon. Member for Shoreditch was appointed to the post; and what was the emergency which necessitated the appointment?

Mr. CHAMBERLAIN: The present Secretary of State for War was appointed to that office on 14th February last, and the office of Minister without Portfolio was vacant from that date until 5th April. As regards the reasons for the appointment, I have at present nothing to add to the previous replies that have been given on this subject.

Major LOWTHER: Is it part of the settled policy of the Government to maintain the office of Minister without Portfolio?

Lord H. CAVENDISH-BENTINCK: Is not the present Prime Minister a Minister without Portfolio?

Colonel ASHLEY: Has the present holder of this office received any salary up to date?

Mr. CHAMBERLAIN: I cannot answer that question without notice. As regards the subject matter of these questions generally, the Vote for the Cabinet Offices, including the salary of the Minister without Portfolio, is to be put down for a day next week, and I think we had better leave the subject for debate then rather than do it by question and answer.

Major LOWTHER: Does the right hon. Gentleman realise that if he could make an announcement now it might facilitate the course of the Debate?

Mr. J. JONES: An announcement of what?

Mr. MARRIOTT: 44.
asked the Prime Minister what precedents, if any, there are, prior to 1917, for the payment of a salary to a Minister without Portfolio?

Mr. CHAMBERLAIN: There are no such precedents prior to 1917, though there were in earlier years portfolios which carried practically no departmental duties.

MINISTRY OF MUNITIONS (INQUIRY).

Mr. CHARLES BARRIE: 38.
asked the Prime Minister whether his attention has been called to the Report of the Committee which was appointed under the chairmanship of Lord Cave to investigate certain allegations made against officials employed by the Ministry of Munitions by an hon. Member of this House; and what action, if any, he proposes to take?

Mr. CHAMBERLAIN: Yes, Sir, I have seen the Report, but in view of the findings of the Committee, I do not see that any action is necessary.

Mr. MacCALLUM SCOTT: Has the right hon. Gentleman any information as to the origin of these very serious allegations, which have been held to be disproved?

Mr. CHAMBERLAIN: I have no information except that which I have received from reading the valuable Report of Lord Cave's Committee.

Lieut.-Colonel WILLEY: Can the right hon. Gentleman state what will be the total cost to the taxpayer of the inquiry into these unfounded charges, including the retention of numerous officials in the service pending the report of the tribunal?

Mr. SPEAKER: Will the hon. and gallant Member please put that down; it is a matter of figures.

AIRSHIP STATION, PULHAM (MEMBERS OF PARLIAMENT VISIT).

Sir W. BARTON: 41.
asked the Prime Minister whether he gave his approval to the proposed trip organised for Friday, 17th June, by the Air Ministry, for Members of Parliament to inspect the airship station at Pulham and to go for a trip in an airship, for which free transport and lunch is to be provided; whether the cost will be borne on public funds; and, if so, what is the estimate of cost and upon what Estimate will it be placed?

Mr. CHAMBERLAIN: The Prime Minister's approval to such a mild departmental enterprise as that mentioned in the question is not required and was not asked. The cost will not be borne on public funds, and in consequence the last part of the question does not arise.

Sir W. BARTON: What will be the cost of the trip?

Mr. CHAMBERLAIN: That is a matter of indifference to me, so long as it is not borne by the public funds.

RUSSIA (EASTERN SIBERIA).

Colonel WEDGWOOD: 42.
asked the Prime Minister whether Japan's attack on the Far Eastern Republic was discussed during the recent visit of the Crown Prince of Japan to this country; whether any communication was received intimating action of this sort by Japan in Siberia before the action took place; and whether His Majesty's Government have any responsibility in any way for the policy of Japan towards Russia?

Mr. CHAMBERLAIN: There is, so far as His Majesty's Government are aware, no ground for the implication contained in the question of the hon. and gallant Member, nor have any discussions of the matter taken place.

Colonel WEDGWOOD: Is it absolutely untrue that we had any responsibility whatever for what has happened in Vladisvostok?

Mr. CHAMBERLAIN: Absolutely untrue, and I do not think currency ought lightly to be given to suspicions that are wholly unfounded.

Colonel WEDGWOOD: Is the right hon. Gentleman aware that exactly that denial was required, in view of the statements that are being made in the continental Press?

Oral Answers to Questions — PEACE TREATIES.

SHIPBUILDING, GERMANY.

Mr. WISE: 32.
asked the Prime Minister if he can state the tonnage launched from the German shipbuilding yards from January, 1921, up to date; whether the German Government has subsidised the German shipbuilding firms; and are the obligations of the Treaty of Versailles as to shipbuilding being kept?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Sir W. Mitchell-Thomson): I have been asked to reply. Definite figures are not available as to the tonnage launched from German yards during this year. It is reported that 12 milliards of marks have been set aside for compensating shipowners who lost their vessels as a result of the War, and it is a condition that 90 per cent. of this sum shall be expended in German yards. Up to the present, the power to require Germany to build merchant ships under paragraph 5 of Annex III of the Reparation Section of the Treaty of Versailles has not been exercised by any of the Allies.

RAILWAY ROLLING STOCK (POLAND).

Lieut.-Colonel WILLEY: 80.
asked the Under-Secretary of State for Foreign Affairs the quantity of rolling stock and locomotives still due to Poland by Germany; and when these should have been delivered?

Sir P. LLOYD-GREAME (Secretary, Overseas Trade Department): So far as I know the total quantity has not yet been fixed.

Lieut.-Colonel WILLEY: Can the hon. and gallant Gentleman give an indication when he will be able to state the exact number of locomotives and the exact amount of rolling stock due to Poland from Germany?

Sir P. LLOYD-GREAME: I cannot do that because it does not rest with this country to fix it, but if the hon. and gallant Member will put down a question I will try to give him a more satisfactory answer.

Sir H. BRITTAIN: Has anything been done in this matter in Eastern Europe or in Central Europe?

Sir P. LLOYD-GREAME: That raises a very specific question, and I must ask for notice.

Lord R. CECIL: Will the Government take care not to give any diplomatic assistance to Poland until she shows herself ready to comply with the terms of the Peace Treaty?

Lieut.-Colonel WILLEY: Is the hon. and gallant Member aware that British trade with Poland is being seriously hampered through the deficiency of rolling stock in Poland, and that rolling stock is due to Poland from Germany under the Treaty? Can he give any indication whether Poland will be assisted to receive that rolling stock from Germany?

Sir P. LLOYD-GREAME: A wider authority has been set up to determine the question put to me by my hon. and gallant Friend. With regard to the point put by the Noble Lord I think I can hardly be expected to answer a broad diplomatic question of that sort on a specific point.

AIRSHIP CONSTRUCTIONAL ESTABLISHMENTS.

Mr. MOSLEY: 76.
asked the Chancellor of the Exchequer whether his attention has been called to the statements contained in paragraph 12 of the Report of the Comptroller and Auditor-General upon the appropriation account of the receipt and expenditure for Air Service, dated
the 21st March, 1921, to the effect that, with one exception, no Report on the Departmental examination of the accounts of loans made by the Admiralty to contractors for airship constructional establishments had been submitted to the Comptroller, and to his further statement in the same paragraph that he had been informed that in the case of one establishment that was closed in 1917 no examination had yet been commenced; whether he can state whether any Departmental examination of these accounts has yet been made; and, if so, the nature of the Reports?

Mr. YOUNG: These matters are under the consideration of the Public Accounts Committee appointed by this House, whose Report I would invite the hon. Member to await.

REGISTRATION EXPENSES.

Mr. TURTON: 77.
asked the Chancellor of the Exchequer whether he is prepared, in the interests of economy, national and local, to revise the scale of registration expenses made under Section 15 of the Representation of the People Act, 1918, by substituting third-class instead of first-class railway fares for registration officers and their deputies?

Mr. YOUNG: This question is under consideration, but the amount of money involved is extremely small, being in the neighbourhood of 10s. a head per annum for each officer on the average.

MESOPOTAMIA (LOCAL LEVIES).

Sir C. YATE: 79.
asked the Under-Secretary of State for Foreign Affairs what steps have been taken to enlist the Assyrian refugees in Mesopotamia in the local Mesopotamian forces; how many have been enlisted up to the present time; and how many are considered to be fit for enlistment?

The UNDER-SECRETARY of STATE for the COLONIES (Mr. E. Wood): Recruitment of Assyrians for the local levies is proceeding. The High Commissioner reported some time ago that 250 recruits had been obtained. I do not doubt that the number is now considerably greater; but I am awaiting full
details by despatch. The total number of Kurdish and Assyrian levies which it is proposed ultimately to raise is 2,500.

Colonel WEDGWOOD: Are they being used in Southern Palestine?

Mr. WOOD: I am afraid that I cannot add anything to what my right hon. Friend said in his speech recently.

CONSULAR FEES.

Sir C. YATE: 81.
asked the Parliamentary Secretary to the Overseas Trade Department whether, when the revised table of consular fees to be levied by British Consuls abroad is issued, he will at the same time issue a table showing the fees levied by Consuls of foreign countries in the United Kingdom?

Sir P. LLOYD-GREAME: I regret that I cannot undertake to issue such a table for the reason stated in the reply given by my right hon. Friend the President of the Board of Trade on 9th June.

Sir C. YATE: Is it not advisable that we should have some comparison made between the fees charged by British and foreign consuls?

Mr. KILEY: Is he aware that foreign consuls in London make no charge for certifying documents, and why should British consuls not be instructed to follow their example?

Sir P. LLOYD-GREAME: I cannot be expected to carry the details of all these consular practices in my head. If my hon. and gallant Friend will put a specific question perhaps he will put it on the Paper. With regard to the supplementary question put by the hon. Member (Mr. Kiley), I quite agree that there may be reasons why the consular fees should be revised, but what is suggested would involve an enormous elaborate table giving the fees of about 50 different countries.

BUSINESS OF THE HOUSE.

Mr. CLYNES: May I ask if the Leader of the House will announce the business for next week; and also what are the Government's intentions as to the length to which they propose to carry the Finance Bill to-night?

Mr. CHAMBERLAIN: I cannot answer the last question of my right hon. Friend, as that is a matter which must be left to the discretion of my right hon. Friend the Chancellor of the Exchequer to be exercised in the light of the course which the proceedings take to-night.

The business we propose to take next week is as follows:

Monday and Tuesday: Further stages of the Finance Bill.

Wednesday: Church of Scotland Bill, Second Reading; Indian Divorces (Validity) Bill, Second, Reading; National Health Insurance Bill, Second Reading; and Motion to set up Estimates Committee.

Thursday: Supply, Cabinet Offices Vote, including salary of Minister without Portfolio; Railway and Canal Agreement Vote and Supplementary Estimate to this Vote; Treasury and Subordinate Departments Vote (Class II 4) Parliamentary Secretaries Salaries.

Friday: The business will be announced next week.

Ordered, "That the Proceedings on the Finance Bill have precedence this day of the Business of Supply."—[Mr. Chamberlain.]

BILL REPORTED.

Grimsby Corporation Bill.

Reported, with Amendments, from the Local Legislation Committee (Section A); Report to lie upon the Table, and to be printed.

MESSAGE FROM THE LORDS.

That they have agreed to, Amendments to

Falmouth Docks Bill [Lords], without Amendment.

That they have passed a Bill, intituled, "An Act to increase the rates for the supply of water by the Southend Waterworks Company; and for other purposes." [Southend Water Bill [Lords.]

Southend Water Bill [Lords],

Read the First time; and referred to the Examiners of Petitions for Private Bills.

STANDING COMMITTEES (CHAIRMEN'S PANEL).

Mr. JOHN WILLIAM WILSON: reported from the Chairmen's Panel: That they had appointed Sir Halford Mackinder to act as Chairman of Standing Committee C (in respect of the Unemployment Insurance Bill).

Report to lie upon the Table.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE C.

Sir SAMUEL ROBEETS reported from the Committee of Selection: That they had nominated the following Members to serve on Standing Committee C: Mr. Adamson, Lieut.-Colonel Ashley, Major Barker, Sir William Barton, Mr. Beckett, Lieut.-Colonel Bell, Captain Wedgwood Benn, Sir William Bird, Captain Sir Rowland Blades, Mr. Blane, Mr. Bower-man, Sir Harry Brittain, Mr. Britton, Mr. Broad, Lieut.-Colonel Buchanan, Mr. William Carter, Sir Arthur Churchman, Sir Cyril Cobb, Brigadier-General Cocker ill, Mr. Cowan, Major Oscar Guest, Mr. Hay day, Lieut.-Colonel Hilder, Captain Hotchkin, Major Howard, Mr. John Jones, Mr. Lawson, Sir Ashton Lister, Captain Loseby, Major Christopher Lowther, Mr. Mills, Sir Robert Newman, Mr. Perkins, Lieut. -Colonel Pickering, Mr. Ramsden, Captain Rankin, Captain Tudor-Rees, Mr. John Robertson, Mr. Simm, Mr. Spencer, Mr. Stanton, Major Steel, Lieut.-Colonel Stephenson, Mr. Waterson, Colonel Weston, Major Wheler, Mr. Charles White, Lieut.-Colonel Sir Gilbert Wills, Dr. Worsfold, and Mr. Robert Young.

Sir SAMUEL ROBERTS further reported from the Committee: That they had added the following Fifteen Members to Standing Committee C (in respect of the Unemployment Insurance Bill): Lieut.-Colonel Allen, Mr. George Balfour, Sir Montague Barlow, Major Barnett, Colonel Sir James Greig, Major Hennessy, Mr. Hogge, Colonel Sir Arthur Holbrook, Mr. Godfrey Locker-Lampson, Mr. Neil Maclean, Dr. Macnamara, Lieut.-Colonel Pinkham, Mr. Sexton, Colonel Wedgwood, and Sir Richard Winfrey.

Reports to lie upon the Table.

Orders of the Day — FINANCE BILL.

Considered in Committee.

[Mr. JAMES HOPE in the Chair.]

Orders of the Day — CUSTOMS AND EXCISE.

CLAUSE 1.—(Continuation of Customs duties imposed under 5 & 6 Geo. 5, c. 89, 9 & 10 Geo. 5, c. 32.)

The following duties of customs imposed by Part I of the Finance (No. 2) Act, 1915, shall, subject to the provisions of Section eight of the Finance Act, 1919 (which relates to Imperial preferential rates), continue to be charged, levied and paid in the case of the new import duties until the first day of May, nineteen hundred and twenty-two, and in the case of the other duties until the first day of August, nineteen hundred and twenty-two, that is to say:—


Duty.
Section of Act.


Increased duty on tea
1


Additional duties on dried fruit
8


New import duties
12

The CHAIRMAN: The first Amendment, in the name of the hon. and gallant Member for East Newcastle (Major Barnes), which proposes to leave out the words, "imposed by Part I of the Finance (No. 2) Act, 1915." is in Order, but I would point out that if it were moved and rejected, it might have a rather embarrassing effect on the subsequent discussion. It cannot be construed alone, and the consequential Amendments would fall with it. I would suggest to the hon. Member that he should proceed to move his second Amendment—to leave out the words, "subject to the provision of Section 8 of the Finance Act, 1919 (which relates to Imperial preferential rates) continue to." That Amendment will read by itself.

Major BARNES: You have been good enough to give us some idea of what is in your mind, and the only point I am not clear upon is this. We wish to raise a discussion on the question of the new import duties as a whole. There are certain Amendments dealing with the duty on tea, and also dealing with the duties on dried fruits. The point I would like to have made clear
is whether, if this first Amendment is not moved, the effect of it will really be that we consent to the continuance of the new import duties, and it would not be possible on a later Amendment to raise a question as to these new import duties. Shall we, by dropping this Amendment, not be committed to their continuance in some degree?

The CHAIRMAN: It is quite true the Committee would be committed to some of the duties levied by the enactment of 1915. The duty on tea still can be taken when it is reached, and if it stands it will be possible to raise points later on on other duties. I do not think the hon. Member can be prejudiced by adopting that course.

Major BARNES: If that is your ruling I think the proper and most advisable course would be not to move this Amendment until we come to the duty on tea, as then we can deal with the duties seriatim.

The CHAIRMAN: I think the Committee should be fully advised of the consequences of that action. I understand some hon. Members wish to raise the question of Colonial Preference. After considering the matter and after consulting Mr. Speaker upon it, I have come to the conclusion that the only way by which this can be done is for the hon. and gallant Member to move his second Amendment.

Major BARNES: I beg to move, to leave out the words "subject to the provision of Section Eight of the Finance Act, 1919 (which relates to Imperial preferential rates), continue to".
All I am anxious to do is not to cut out the Debate on Colonial Preference. I do not propose in the remarks I am about to make to go into the question of preferential rates in so far as they apply to all the commodities that come under this provision. No doubt, other hon. Members who wish to take part in the discussion will raise questions as to the effect of these differential rates on motor cars, musical instruments, and so on, but I shall confine my remarks to the-way in which they work out in relation to the tea duty, and that will save me making references to the matter when I come to my own Amendment on the question of the tea duty. I would like to
read to the House an extract from the "Financial Times" of 17th January, 1921, which deals with this question on the differential duties between British and foreign grown tea. These duties, or rather this differentiation, hit Java and Sumatra very hard, the plantations there being mostly British owned. This experiment in Tariff Reform is not very successful, and a tea broker writing to the "Financial Times" on the date mentioned, says:
Prior to the introduction of the differential tariff, London was the distributing centre for China tea. Merchants used to bring the bulk of the season's exports from China to London, with a view to catering for the demand which existed in the United Kingdom, and also the Continental and other foreign market demand. The differential duty, penalising China tea to the extent of two pence a pound, has resulted in making that particular kind of China tea, which was suitable for Continental demand, absolutely useless for inclusion in low-priced blends for the home trade. The result of the loss of the alternative market for inclusion in home trade blends has been to cause the importation of this class of tea to entirely cease, leaving the Continental demand to be filled either direct from China or from Hamburg or Holland. Thus does London lose all this distributing trade.
4.0 P.M.
This quotation is hot only of interest and importance in dealing with the question of the duty on tea, but it also raises the question of the effect of these preferential duties. That which is true here will, doubtless, be true in other cases. In the first place, we are losing the actual trade in this particular commodity between these exporting countries and London, thus doing away with the means of livelihood of the people who are engaged in planting and distributing. You have a whole chain of people in this country whose employment is entirely destroyed by the operation of this duty. The Chancellor of the Exchequer may say that this is only a very small matter, but these are the days of small things, as we have been educated to believe in the Debates on the Safeguarding of Industries Bill. There are many matters which are regarded by the Government as worthy of protection, although, in fact, the amount of capital and labour involved is very samll. I do not, therefore, think that the Chancellor of the Exchequer can give me that answer. I would draw his attention to what is happening in this particular case. He has now passed away from the Board of Trade to the Exchequer, and he can take
a different point of view. A loss of trade means a loss of income, and a loss of income means a loss of revenue. Viewing this matter purely from the point of view of revenue, no good turn is being served by the retention of the preferential duty on this commodity. I do not know whether the whole question of Imperial Preference is too sacred for the right hon. Gentleman to lay his hands upon it, but here is a case where a preferential duty is working injury to people of this country, and I hope that he may be able to give us some assurance that some modification will be made.

The CHAIRMAN: Before putting the Question, I presume the hon. and gallant Member, in the event of the Amendment being carried, will propose to reduce the Customs Duty to an extent which will prevent any more tax being levied, whether on Colonial or other products?

Major BARNES: indicated assent.

Sir WILLTAM BARTON: There is a strong case for the reconsideration of this matter. Whatever may be the opinion of hon. Members about Preference, it works out in relation to tea in a manner which I am quite sure was never contemplated. Wherever you have a preference, necessarily you have a discrimination against somebody, and in this case it is found to work very injuriously. It seems an almost needless thing that there should be a preference on tea; at all, because of all the tea that comes into this country something over 90 per cent. comes from India, and the preference, so far as India is concerned, is almost of no value. In practice it really means a concession to the consumers of tea in this country. This preference discriminated against two countries, one being China and the other Java. The extraordinary feature of the case is that both those countries exercise no discrimination against us. They have no preferential duties. Both of them go in for taxation for revenue purposes only, and, indeed, they have offered great advantages to our country. There is no doubt that in China they do resent this discrimination, in view of the fact that they have never in any way discriminated against us. The matter is even more serious in the case of Java. Nominally, Java is a Dutch possession, but, although nominally it is a Dutch possession, it was, I believe, exchanged for Ceylon, the bargain being that if the time ever came
when Holland could not administer it it would be returned to this country. Its administration by Holland has been on the lines of absolute equality, the Dutch themselves claiming no privilege in their Colony, just as in the past we have claimed no privilege in our Colony. As a matter of fact, Java to-day is one of the richest countries in the world, and has become a most valuable British market. It seems to me a dangerous thing to bring in discrimination against two countries who have never discriminated against us, and whose trade is very valuable to this country. The Government—putting aside the sentimental consideration of Colonial Preference—should look at it from the point of view of the broad general principle of what is best for the trade of the country as a whole, what will tend to enrich the country, and what will tend to impoverish it. I am sure, if the matter be looked into, that this preference will be found to be of no value to India, to discriminate against two of our best friends, and, consequently, to be of no advantage to us whatever.

Sir WILLIAM PEARCE: I want to call attention to the question of Colonial preference on industrial alcohol.

The CHAIRMAN: I do not think that industrial alcohol is one of the articles on which an increase duty was imposed by the Finance Act, 1919.

Sir W. PEARCE: Are you, Sir, quite sure that is so? There is a Colonial preference of 2s. 6d. per gallon imposed on industrial alcohol.

The CHAIRMAN: It is not one of the articles dealt with in this Clause and is not covered by the words of the Clause.

Sir W. PEARCE: It is a point of some importance. Can you inform us where it would be possible to bring it in?

The CHAIRMAN: I presume it may come in as an Amendment to the duties on spirits.

Captain W. BENN: There are one or two new considerations which come into our Debate to-day which were not present when we discussed this subject last year. I understand that the view of the Government—it has always seemed very offensive to the real spirit of Empire—is that by some cash arrangement of this kind you can unite the Dominions to this
country, the Dominions which were so gloriously united to us by more enduring ties during the War. The case of the Government is that if it be not necessary it is at least desirable to have some money basis as the real enduring foundation of the Imperial races. If that be so, we must examine it on that basis and ask what exactly the Government are doing, because the position has been largely modified by the Safeguarding of Industries Bill. Take the extreme irregularity of the operation of this preference. First of all, certain duties which happened to be on the Statute Book before the operation of preference were selected. They were the duties imposed by Mr. McKenna in 1915 and also certain duties., such as the Tea Duty, which were already part of our fiscal system. Therefore a large number of Colonial producers, who might have desired to have the advantage and whose goodwill, if it could be obtained by any such means, would be of great importance, were entirely left out in the cold by the system proposed by the Government. Mr. Joseph Chamberlain was quite right when he pointed out that to make such a system effective you must have a tax on raw materials and food.
The first complaint made was that the operation of the preference was extremely irregular and unlikely to excite anything but irritation in the minds of the persons whom it was intended to benefit. It was, however, given. On those duties—I am speaking for the moment of the McKenna duties—a preference of one-third was given. The Dominion exporters pay, roughly, 22 per cent., whereas other exporters or consumers in this country pay 33 per cent. The Dominion exporters, therefore, had a rebate of one-third of the duty. Another tariff has been imposed in connection with the key industries. Certain articles are to be protected in this country by a duty of one-third. The duty is entirely remitted for the Colonial exporter. The man who really wants the preference, the man producing wool or food of some kind, gets nothing; the man producing cinema films, watches, or clocks gets a rebate of one-third, and the man producing any of the articles mentioned in the Schedule to the Key Industries Bill gets the whole of the duty remitted—so irregular is the operation of the right hon. Gentleman's tariff! At the same time that the Government pre-
tend that some money consideration of this kind can solidify the Empire, they propose a Bill which is going to impose a duty of 33⅓ per cent. on a large number of the imports which come to us from other parts of the Empire. Under Part II of the Safeguarding of Industries Bill, they are imposing a duty of one-third of the value upon things like hides from India and upon commodities from other parts of the Empire, when the Board of Trade deems that it can be shown that certain conditions are being fulfilled. It is unfortunate, if we are to be turned into a protectionist country —which, of course, we are rapidly becoming —[HON. MEMBERS: "Hear, hear!"]— I am well aware that the majority behind the Government is a protectionist majority. That is not news to us, and I am glad to find that it is confirmed by the Government's followers. But I can say, although I have no sympathy with protectionist theory, that it would be desirable to have some scientific, balanced, thought-out tariff, instead of one made up by hops and jumps and bits and scraps in the way that the present tariff is concocted. As I have pointed out, this preference works in an irregular way. Different rates are charged on different articles, and some, which are the most important, get no preference whatever. At the time when it is being given with the object which the Government have announced, they are proposing, so far from assisting the producers in the Dominions, to lay on the goods which they send to this country a heavy duty.

The CHANCELLOR of the EXCHEQUER (Sir Robert Horne): indicated dissent.

Captain BENN: I think the Chancellor of the Exchequer will not deny that in India, where the currency is at a discount as compared with ours, a duty of 33⅓ per cent. could be imposed at his order.

Mr. BIGLAND: It is not likely.

Captain BENN: I am talking about the powers which the Government have in the Bills that they are passing. How they will use them each of us must judge according to his experience of the operations of the Government in the past. So far from there being any reality or pretence that we are sacrificing something of our own to give a money benefit to the Dominions, the fact is that what
we are giving is casual, irregular, and unsatisfactory, and we are imposing on these very Dominions a heavy tax which the exporters there or the importers in this country will have to meet.

Mr. KILEY: Before we come to a decision on this Amendment, we should be glad to know what return is being received from this preference. One is aware that certain Colonies, whatever duties they impose, do give a preference to goods which are imported from Great Britain, and one wonders to what extent this obligation is responded to by all the powers that levy tolls upon the importation of British goods. It would be a great help to us, before we vote on this matter, to know whether all our Colonies are responding to the generous treatment which they are receiving from us.

Sir R. HORNE: The character of this discussion reveals the fact that a matter which is now threadbare through very frequent controversy has not produced during the last year any new ideas on the part of those who take exception to this particular form of tax. I should like to say one word about the idea of Imperial Preference in general. My hon. and gallant Friend (Captain Benn) says it is our desire to put the connections of Empire purely on a cash basis. Nothing, of course, could be further from the truth than that suggestion. We are just as ardent as he in our devotion to those great sentiments and traditions which unite all the various parts of this Empire, and I think it would be peculiarly unfortunate, at a time when the representatives of the Dominions and Colonies have assembled in the very centre of the Empire, if anything were done by this House which would indicate that we were in any way departing from the indications we have given that we are not merely anxious to keep the bonds of sentiment tight and firm, but also that we should be able to assist each other in the affairs of our daily life and in the trade and commerce which we carry on throughout the world. One used to hear attacks made upon the theory of Imperial Preference on the ground that it could never be granted except by doing injury to our own trade at home, or in some way putting an additional burden on the British taxpayer. The topic of discussion to-day is a particularly unfortunate one for my hon. Friends opposite when
they seek to attack the theory of Imperial Preference. The hon. and gallant Member (Major Barnes) has sought to point out some infinitesimal portion of the tea trade which in some way is damaged by the Imperial Preference which is granted. In point of fact, the preference granted upon tea inures to the benefit of everyone who drinks tea in this country, The effect of it is that it lets off 90 per cent. of our importation of tea in the year to the extent of 2d. a lb., and, since the proportion which comes in under preference is so large, the real effect is that it reduces, on a commodity with regard to which there is no competitive production at home, the actual price of tea over the whole bulk consumed by 2d. a lb. In this case, at least, therefore, it can never be suggested that any injury is being done to anyone in this country by the granting of this preference. On the other hand, it can be maintained with great force and confidence that everyone gains by what is done.
Let me refer for a moment to what the hon. and gallant Member (Major Barnes) mentioned with regard to Java and China tea. His case is that these cheap teas, which come here for the purpose of being blended with other teas and of being thereafter exported, are in some way injured by the granting of a preference to the tea which comes from our great Dominions and Colonies. There could be no greater misapprehension than to suppose that to be true. In so far as these teas come here for the purpose of being blended, they can be blended in bond with the other teas, and need never pay duty at all. Accordingly, so far as regards the export trade in Wended teas which has hitherto been carried on in this country, there is no possible injury that can be suffered by the particular trade to which the hon. and gallant Member refers. I think that if my hon. and gallant Friend will pursue his investigations further, he will find that such injury as the trade of Java and China has suffered has been due, not at all to the action of this preference, but really to the fact that in recent times there has been much less tea produced in those countries. The tea trade has been rather hardly hit in many places, and we have had a lower production that we have previously experienced, with the result that not so much of that tea has
been drunk in this country. It has nothing whatever to do with the question of the preference granted to our brethren across the seas. I think that those are all the considerations which have been raised from the Benches opposite, and I hope the Committee will reject the Amendment.

Major BARNES: The Chancellor of the Exchequer suggested that I might have pursued my investigations further. Before dealing with that point, may I say that I think he has found a novel way of defending Imperial Preference in saying that, by giving Imperial Preference you confer a benefit upon the people at home by the difference between the commodities on which the preference is not granted and those on which it is. For example, you put 1s. a pound on tea, and take 2d. off in the case of tea that comes into this country from our Dominions abroad, and to that extent the right hon. Gentleman's argument is that you benefit the people at home. Of course, from that point of view the argument seems to be unanswerable, but what we on this side suspect is that, if it had not been for the purpose of putting that 2d. on, you would never have put on Is. Your original tax would have been 10d. Therefore, with a 10d. tax, we should not only have enjoyed the tea from our Dominions, but also the tea from China as well. On the line of argument adopted by the Chancellor of the Exchequer, why not put a 2s. tax on tea, and give a preference of 1s. 2d., and then point to the advantages which the Home consumer is enjoying in not having to pay that 1s. 2d.? I think that the Chancellor of the Exchequer, on reflection, will agree that the argument he has put forward is not entitled to very much consideration.
On the question of China tea, I think he has rather missed the point. The point is that China tea, which used to come to this country for the purpose of being blended with other teas for export abroad, is almost a vanishing quantity now. What are the figures? The figures which I have here are taken from the "Financial Times"—an unimpeachable source—and they show that the shipments to London of black tea from Shanghai and Foochow, for the season to the end of last November, were only 782,000 lbs., while they amounted to nearly 10,000,000
lbs. the year before. An import of 10,000,000 lbs. has dropped to less than 1,000,000 lbs., but that is nothing at all to the Chancellor of the Exchequer. He says it is infinitesimal. That, however, is not the Whole case. The case is that that 10,000,000 lbs. was not going to be exported merely as 10,000,000 lbs., but was going to be blended with a very much larger quantity of tea which would then have been exported. What is happening, therefore, in this country, affects the re-export, not of 10,000,000 lbs., but of the whole bulk of the tea of which that 10,000,000 lbs. forms only a small fraction. That is what is happening under the preferential duty. It is a matter of no concern at all to the Chancellor of the Exchequer. He is content to see that industry come to what is described in the "Financial Times" as an entirely vanishing point. It appears to me, that if that be the view taken by the Chancellor of the Exchequer of this country with regard to a British trade which has been built up over a very great number of years— because this tea trade of ours is not a matter of last year or the year before, but is a century old—if the Chancellor of the Exchequer of this country regards the vanishing of a century-old trade with equanimity and as infinitesimal, it will not encourage the business world to look upon his appointment with pleasure.

Sir J. D. REES: I cannot help thinking that the tea producers would accept the line taken by the Chancellor of the Exchequer in this matter. My hon. and gallant Friend (Major Barnes) has given some figures, which, no doubt, are the latest figures and correct; but it does not at all follow that they are the result of this preference. The tea trade, like everything else, has been in a thoroughly dis-organised state. The condition of Southern China is notoriously one approaching anarchy. There is fighting between one province and another, and, when everyone is fighting, tea is not grown as regularly and as well as usual. More than that, the consumption of China tea has been, within my recollection, a decreasing quantity for many years. Nor, again, is 10,000,000 lbs—if it was 10,000,000 lbs. last year—which has now been reduced to under 1,000,000 lbs., a very large figure. It is only that number of pounds, and is not really a very large quantity compared with the total tea crop. Nor can I at all understand the tender-
ness of my hon. Friends towards Java. What does it matter to us if Java is slightly prejudiced by this duty?

Major BARNES: British capital is invested there.

Sir J. D. REES: I have not the figures by me, but I do know that Java is fast becoming an effective competitor, after its degree, with British-grown tea. Therefore, if this Measure does slightly advantage British tea in that competition and enable it to maintain the almost pre-eminent position that-it ought to have, I cannot understand why that should be any matter of regret to any Member of this House.

Mr. KILEY: The Chancellor did not favour the Committee with any information on the point to which I called his attention. Has there been any satisfactory result from this great generosity on our part in giving these preferential duties to our Dominions? Has there been any increased return, or any return, from any of our Possessions which have received this bounty? Have they given a similar return on the British goods which they import? I should also like to know if the right hon. Gentleman could give any information as to the general working of these preferential duties? What, for instance, will be the result to the sugar concern in which the Government has invested so much money, and in which they are guaranteeing a dividend to the shareholders?

The CHAIRMAN: We are not concerned with that matter upon this Amendment.

Mr. KILEY: The point I was trying to lead up to was this: We are giving a preference to certain of our Possessions who send us sugar. The Government themselves have entered into the sugar production business, and they or their investors will be at a disadvantage because those who have invested their capital in our Dominions will pay a less duty under the preference than a British investor who has invested money in his own country will do. I should like to know what the result will be, or if the right hon. Gentleman contemplates taking any action in that or any similar direction? It would be very useful if the right
hon. Gentleman could give us some information as to how these preferences worked in a general way.

Sir R. HORNE: I should be very glad to give any information about sugar, but quite obviously it does not arise under this Amendment at all, and it would be quite out of order to deal with the matter. I had some difficulty in understanding the hon. Member's question. I am now rather astonished to realise that he has never heard the fact that for years we have been enjoying preferences from our

Dominions which we are only now very tardily reciprocating. He may very easily make the inquiry for himself. I would not presume to detain the House while I explain what the preferences really are.

Mr. KILEY: Have any other of our Dominions which before had not given us a preference given us preferences since that period? That is the question I asked.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 174; Noes, 64.

Division No. 167.]
AYES.
[4.35 p.m.


Agg-Gardner, Sir James Tynte
Fell, Sir Arthur
Molson, Major John Elsdale


Ainsworth, Captain Charles
FitzRoy, Captain Hon. Edward A.
Moreing, Captain Algernon H.


Allen, Lieut.-Colonel William James
Flannery, Sir James Fortescue
Morris, Richard


Amery, Leopold C. M. S.
Forrest, Walter
Murray, William (Dumfries)


Astbury, Lieut.-Com. Frederick W.
Foxcroft, Captain Charles Talbot
Neal, Arthur


Bagley, Captain E. Ashton
Gange, E. Stanley
Newman, Sir R. H. S. D. L. (Exeter)


Baird, Sir John Lawrence
Gardiner, James
Nicholson, William G. (Petersfield)


Baldwin, Rt. Hon. Stanley
Gee, Captain Robert
Oman, Sir Charles William C.


Balfour, Rt. Hon. A. J. (City of Lon.)
Gibbs, Colonel George Abraham
Ormsby-Gore, Hon. William


Banbury, Rt. Hon. Sir Frederick G.
Gilbert, James Daniel
Pearce, Sir William


Barnett, Major Richard W.
Gilmour, Lieut.-Colonel Sir John
Pease, Rt. Hon. Herbert Pike


Barnston, Major Harry
Gould, James C.
Pinkham, Lieut.-Colonel Charles


Barrand, A. R.
Greenwood, Colonel Sir Hamar
Pownall, Lieut.-Colonel Assheton


Beauchamp, Sir Edward
Greenwood, William (Stockport)
Prescott, Major W. H.


Bell, Lieut.-Col. w. C. H. (Devizes)
Greig, Colonel James William
Pretyman, Rt. Hon. Ernest G.


Bellairs, Commander Carlyon W.
Gretton, Colonel John
Purchase, H. G.


Bennett, Sir Thomas Jewell
Hacking, Captain Douglas H.
Raeburn, Sir William H.


Bigland, Alfred
Hailwood, Augustine
Ratcliffe, Henry Butler


Birchall, Major J. Dearman
Harris, Sir Henry Percy
Raw, Lieutenant-Colonel Dr. N.


Bird, Sir A. (Wolverhampton, West)
Hennessy, Major J. R. G.
Rees, Sir J. D. (Nottingham, East)


Bird, Sir William B. M. (Chichester)
Henry, Denis S. (Londonderry, S.)
Roberts, Sir S. (Sheffield, Ecclesall)


Bowyer, Captain G. W. E.
Herbert, Dennis (Hertford, Watford)
Rodger, A. K.


Brown, Major D. C.
Hills, Major John Waller
Samuel, A. M. (Surrey, Farnham)


Buchanan, Lieut.-Colonel A. L. H.
Hinds, John
Seager, Sir William


Buckley, Lieut.-Colonel A.
Hoare, Lieut.-Colonel Sir S. J. G.
Seddon, J. A.


Bull, Rt. Hon. Sir William James
Holbrook, Sir Arthur Richard
Shaw, Capt. William T. (Forfar)


Burdon, Colonel Rowland
Hope, Sir H. (Stirling & Cl'ckm'nn'n,W.)
Simm, M. T.


Butcher, Sir John George
Hopkins, John W. W.
Sprot, Colonel Sir Alexander


Campbell, J. D. G.
Hopkinson, A. (Lancaster, Mossley)
Stanier, Captain Sir Beville


Cautley, Henry Strother
Horne, Sir R. S. (Glasgow, Hillhead)
Stanton, Charles Butt


Chadwick, Sir Robert Burton
Hotchkin, Captain Stafford Vere
Stephenson, Lieut.-Colonel H. K


Chamberlain, Rt. Hn. J. A. (Birm. W.)
Hurd, Percy A.
Stewart, Gershom


Chamberlain, N. (Birm., Ladywood)
Hurst, Lieut.-Colonel Gerald B.
Sturrock, J. Leng


Cheyne, Sir William Watson
Inskip, Thomas Walker H.
Sugden, W. H.


Clough, Robert
James, Lieut.-Colonel Hon. Cuthbert
Surtees, Brigadier-General H. C.


Cobb, Sir Cyril
Jesson, C.
Taylor, J.


Cockerill, Brigadier-General G. K.
Jones, J. T. (Carmarthen, Llanelly)
Thomson, F. C. (Aberdeen, South)


Cohen, Major J. Brunel
Kelley, Major Fred (Rotherham)
Thomson, T. (Middlesbrough, West)


Colfox, Major Wm. Phillips
Kidd, James
Turton, Edmund Russborough


Colvin, Brig.-General Richard Beale
King, Captain Henry Douglas
Walters, Rt. Hon. Sir John Tudor


Conway, Sir W. Martin
Larmor, Sir Joseph
Walton, J. (York, W. R., Don Valley)


Coote, Colin Reith (Isle of Ely)
Law, Alfred J. (Rochdale)
Ward, Col. L. (Kingston-upon-Hull)


Cope, Major William
Lewis, Rt. Hon. J. H. (Univ., Wales)
Watson, Captain John Bertrand


Craig, Capt. C. C. (Antrim, South)
Lloyd-Greame, Sir P.
Wheler, Col. Granville C. H.


Craik, Rt. Hon. Sir Henry
Locker-Lampson, Com. O. (H'tingd'n)
Willey, Lieut.-Colonel F. V.


Croft, Lieut.-Colonel Henry Page
Lorden, John William
Williams, C. (Tavistock)


Curzon, Captain Viscount
Lowther, Major C. (Cumberland, N.)
Williamson, Rt. Hon. Sir Archibald


Davies, Alfred Thomas (Lincoln)
Lowther, Maj.-Gen. Sir H.C. (P'nrith)
Wills, Lt.-Col. Sir Gilbert Alan H.


Davies, Sir David Sanders (Denbigh)
M'Donald, Dr. Bouverie F. P.
Wilson-Fox, Henry


Davies, Sir Joseph (Chester, Crewe)
McLaren, Robert (Lanark, Northern)
Wise, Frederick


Davies, Thomas (Cirencester)
McMicking, Major Gilbert
Wood, Hon. Edward F. L. (Ripon)


Davison, Sir W. H. (Kensington, S.)
McNeill, Ronald (Kent, Canterbury)
Wood, Sir H. K. (Woolwich, West)


Dawes, James Arthur
Magnus, Sir Philip
Yeo, Sir Alfred William


Denniss, Edmund R. B. (Oldham)
Maitland, Sir Arthur D. Steel-
Young, E. H. (Norwich)


Dockrell. Sir Maurice
Malone, Major P. B. (Tottenham, S.)
Younger, Sir George


Doyle, N. Grattan
Marriott, John Arthur Ransome



Du Pre, Colonel William Baring
Matthews, David
TELLERS FOR THE AYES.—


Edwards, Major J. (Aberavon)
Mildmay, Colonel Rt. Hon. F. B.
Colonel Leslie Wilson and Mr.


Elliot, Capt. Walter E. (Lanark)
Mitchell, William Lane
Parker.


Falle, Major Sir Bertram Godfray




NOES.


Adamson, Rt. Hon. William
Halls, Walter
Rendall, Athelstan


Asquith, Rt. Hon. Herbert Henry
Hallas, Eldred
Richardson, R. (Houghton-le-Spring)


Barker, G. (Monmouth, Abertillery)
Hartshorn, Vernon
Roberts, Frederick O. (W. Bromwich)


Benn, Captain Wedgwood (Leith)
Hayday, Arthur
Robertson, John


Bowerman, Rt. Hon. Charles W.
Hayward, Evan
Rose, Frank H.


Bromfield, William
Henderson, Rt. Hon. A. (Widnes)
Sexton, James


Brown, James (Ayr and Bute)
Hirst, G. H.
Shaw, Thomas (Preston)


Cairns, John
Hogge, James Myles
Short, Alfred (Wednesbury)


Carter, W. (Nottingham, Mansfield)
Irving, Dan
Sitch, Charles H.


Clynes, Rt. Hon. John R
Jones, J. J. (West Ham, Silvertown)
Spencer, George A.


Davies, A. (Lancaster, Clitheroe)
Kennedy, Thomas
Spoor, B. G.


Edwards, C. (Monmouth, Bedwellty)
Lawson, John James
Thorne, W. (West Ham, Plaistow)


Edwards, G. (Norfolk, South)
Lunn, William
Walsh, Stephen (Lancaster, Ince)


Galbraith, Samuel
Maclean, Neil (Glasgow, Govan)
Waterson, A. E.


Gillis, William
MacVeagh, Jeremiah
Wedgwood, Colonel Josiah C.


Glanville, Harold James
Morgan, Major D. Watts
Wignall, James


Graham, R. (Nelson and Colne)
Murray, Hon. A. C. (Aberdeen)
Wilkie, Alexander


Graham, W. (Edinburgh, Central)
Newbould, Alfred Ernest
Williams, Aneurin (Durham, Consett)


Griffiths, T. (Monmouth, Pontypool)
O'Grady, James
Wilson, Rt. Hon. J. W. (Stourbridge)


Grundy, T. W.
Parkinson, John Allen (Wigan)
Wilson, W. Tyson (Westhoughton)


Guest, J. (York, W.R., Hemsworth)
Raffan, Peter Wilson



Hall, F. (York, W. R., Normanton)
Rees, Capt. J. Tudor- (Barnstaple)
TELLERS FOR THE NOES.—




Major Barnes and Mr. Kiley.

The CHAIRMAN: called on Mr. Neil Maclean.

Major BARNES: I understood that the discussion we have just had was not going to preclude the discussion of the following Amendments. Do I understand that you are passing over all the intervening Amendments?

The CHAIRMAN: The third Amendment has been covered by the last discussion, and the fourth was dependent on the first. I thought I made that clear at the time. The hon. and gallant Gentleman asked me whether detailed consideration of these different Import Duties would be in order, and I said it would.

Mr. NEIL MACLEAN: I beg to move, to leave out the words
Increased duty on tea 1.
This is the third time I have tried to have the duties upon tea entirely repealed. At present it is even more important than it was upon previous occasions when I moved similar Amendments. There is considerable distress up and down the country among working people generally, who have in the main to depend upon tea as one of the beverages they consume in the home, and the duty that is imposed at present is a very great hardship upon those people. The duty as it stands is 10d. per lb. upon Empire-grown tea and 1s. per lb. upon any foreign tea. The cheapest tea can be had to-day at, roughly, 2s. per lb. That means, if it is a foreign tea, that we are paying as tax practically 50 per cent. of the purchase price. That is too severe
an imposition to place upon the class of people who purchase the cheapest quality of tea. A tax of 50 per cent. is a tax which no other section of the community is called upon to pay, and the higher the price of the tea goes the less is the proportion which the purchaser pays in tax. If the tea is 4s. a lb., as many teas are, the purchaser, if it is foreign tea, is paying only 25 per cent. of tax, whereas in the cheaper tea the purchaser pays 50 per cent. in taxation. Yesterday a big lock-out which would affect 1,500,000 people was averted; it was to have taken place this morning. Up and down the country there are from 4,500,000 to 5,000,000 people out of work. We have distress over the whole country, and yet that class of people, the purchasers of the cheaper qualities of tea, are the individuals to whom you are offering no concession in this Finance Bill. You have scrapped the Excess Profits Duty, you have given a concession to the merchants. You have given a concession to the manufacturers. You have wiped out a duty which they have contended was a great hardship upon production and upon the development of trade. Last year the late Chancellor of the Exchequer went so far as to give a very large concession to the landowners. He abolished the Land Taxes, and announced that if claims were made he would hand back to those landowners who have paid the Land Tax the taxes that have been paid by them. Landowners, manufacturers and merchants have all received concessions from the Chancellor of the Exchequer. In the face of the present economic upheaval, and of the poverty and distress in most
industrial districts, is it not time that in the granting of concessions something might be done in these days of high prices to ameloriate somewhat the lot of the working classes?
I can anticipate the answer which the Chancellor of the Exchequer will give. He will say that it is necessary for the purpose of revenue to keep this tax at the present figure, which is very much in excess of the charge in pre-War times. There are other things which might be taxed. There are other avenues from which revenue could be raised. Surely it is not beyond the wit of the Chancellor of the Exchequer, with all the experience of past Chancellors of the Exchequer, and with his own personal knowledge of the conditions in industry, to fashion a Budget that will place the taxation of the country upon the shoulders of those best able to bear that burden. So far as I can discover from reading the Finance Bill, it is again the bottom dog that is called upon to bear the heaviest part of the burden. You have placed the merchants of the country in their pre-War position, so far as the Excess Profits Duty goes, and you have placed the landlords in the position they occupied prior to the Land Duties Act.

Major WHELER: I cannot accept that statement. It is absolutely incorrect. The Income Tax on the land has been increased six times.

The CHAIRMAN: That is not a point of Order. If the hon. Member gives way, the hon. Member can make an explanation.

Mr. MACLEAN: Those who have listened to me on previous Finance Bills know my views of taxation. I am in favour of direct taxation only, and the abolition of all indirect taxation. When I said that the landlords had been relieved of taxation and placed in their pre-War position, I made it perfectly clear that they had been relieved of that part of taxation which had been imposed upon them by a Budget prior to the War, namely, the Land Duties.

Colonel Sir J. GREIG: Is not the hon. Member aware that the Land Duties were found to be illegal and, therefore, impossible?

Mr. MACLEAN: I am not concerned at the moment whether the Land Duties were illegal or not.

The CHAIRMAN: These arguments are irregular. The hon. Member is justified in referring to the Land Duties by way of illustration, but it is not in order on either side to debate them.

Mr. MACLEAN: I do not intend to debate them. I was using them as an illustration of what has been done for a certain section of the community by the Chancellor of the Exchequer and previous Chancellors of the Exchequer.

Sir J. GREIG: indicated dissent.

Mr. MACLEAN: The hon. Member shakes his head. Shaking his head may indicate his opinion, but it does not alter the facts. I am putting before the Chancellor of the Exchequer a claim for justice for the working classes, and, indeed, all classes in connection with the Tea Duty. The Tea Duty does not bring in such a great sum of money, compared with the grand total drawn from taxation, and it would be perfectly easy and simple for the Chancellor of the Exchequer to devise some scheme whereby the amount he proposes to raise by the Tea Duty can be raised by imposing taxation on some other commodity, or some other source of revenue.

Sir J. D. REES: The Income Tax, I suppose.

Mr. MACLEAN: Well, the Income Tax. Put it on something other than the food of the people. We have differences of opinion as to the cost of living whether the figures submitted by Government Departments are correct or incorrect. At the same time we have the domestic budget of the working classes very heavy to-day. The Labour party's appeal for the withdrawal of the Tea Duty is not an appeal for a withdrawal which would affect only one class in the community, but all classes, but most of all the working class, which has had fewer concessions and less consideration during the last seven years from the Chancellor of the Exchequer than any section of the community.

Mr. MARRIOTT: Many Members of the Committee will feel that the speech of the hon. Member is the sort of speech which fills one with despair. I do not suggest that it is a speech that we have
not heard before. It is a hardy annual, but it fills one with despair all the same. The substance of the speech was that this particular tax falls with exceptional heaviness on the particular section of the community represented by the hon. Member. That is admitted. He also says that this tax is falling upon them at the moment when everything should be done to lower the cost of their living as far as possible. We also admit that. We admit that the moment is one of great gravity in social and in industrial affairs. All this is common ground between the hon. Gentleman and ourselves, but we join issue with him from this point. Does he suggest that no portion of the taxation of the country should fall upon the class for whom he is speaking? That is the effect of his speech. There are very few taxes which at the present time fall upon that class. There is almost entire exemption from taxation for people who do not drink, who do not smoke, and who do not drink tea. From them hardly any taxation is taken. The hon. Member asks us to repeal the Tea Duty. Will he point out to the Committee what taxation is left to that class if this duty is repealed in the way that he desires? He says that every other class of the community has been treated with far greater generosity. He says that the Chancellor of the Exchequer has repealed the Land Duties. Why? First of all, because they were discovered to be illegal, and, secondly, because it was discovered that they were costing more to collect than the revenue derived from them. Surely, hon. Gentlemen opposite do not propose to continue a tax merely for the sake of taxation. We impose taxation for the sake of revenue and for no other purpose, I hope, generally speaking. When you discover that a tax is costing more to collect than it yields, and that it involves no benefit, but a deficit, to the State—

The CHAIRMAN: The hon. Member is pursuing the subject too far.

Mr. MARRIOTT: The hon. Member opposite used the Land Duties for the purpose of illustration, and it is for the same purpose of illustration that I am endeavouring to use them.

The CHAIRMAN: I allowed the hon. Member to go on for that purpose only.

5.0 P.M

Mr. MARRIOTT: I will leave the subject and return to my main point, which is that if the Amendment be carried the effect must be to throw additional taxation on some other element in the Budget. We are entitled to ask the hon. Member what he proposes to do, where he proposes to get his revenue. He wants one item of revenue which falls upon the class for which he is entitled to speak to be deleted from the Finance Bill. It is desirable to maintain the Tea Duty, for two reasons. First, because tea is a revenue-producing tax; second, it is one of the very few taxes in the whole Budget which are borne by a very considerable section of the people.

Sir J. D. REES: My hon. Friend described this as a hardy annual. I have frequently applied the same epithet to it, but I think it has lived to become a foolhardy annual. I am in a somewhat difficult position. Unlike my hon. Friend behind me, who always demolishes these cases with arguments drawn from political economy, I would like to see this duty reduced, and I would like to see all the excise list reduced. As one who is interested in the production of tea I would like to see a reduction in the tea duty. That is why I resent the untenable impossible arguments which put off for an indefinite period a consummation which I would like to see brought about. My hon. Friend enlarged upon his solution, treated it as everybody else has done during the last 16 years, and hung upon it a discourse upon direct and indirect taxation; but I would suggest that this has been done so often before that it has become a positive outrage in the consumption of Parliamentary time. The whole of that argument is advanced without the smallest regard to elementary justice. The hon. Gentleman does not even remember that the direct taxpayer also pays indirect taxation and that the tea duty is almost the only contribution to the revenue made by those miserable melancholy individuals who neither drink nor smoke nor indulge in any of the pleasures of life. He said that the tea duty was the heaviest in relation to the value of the product that is imposed in this country, but that is not true. Tobacco is infinitely more heavily taxed.

Mr. MACLEAN: I was not comparing the duty paid on tea with the duties
paid on other commodities. I was explaining how the duty paid on the cheapest quality of tea differs in proportion from that paid on the higher and more excellent quality of tea.

Sir J. D. REES: Those whom the hon. Gentleman claims more particularly to represent, whom I think I represent as well as he, at any rate as sincerely as he, are getting their tea at the most extraordinarily cheap rates. They are getting it at half the price at which it is produced. Yet the hon. Gentleman reproduces this foolhardy annual this year. He does not take into account that the whole production of tea is in a state of seething confusion with agitators going round among the coolies—who are getting twice as much as they did before—and introducing trade unions and other institutions of Western civilisation. This is very unfortunate seeing that tea is being sold at a ruinous loss. My hon. Friend has only got to look at those concoctions, as he would call them, the reports of tea companies and the speeches of those concerned, and he will see that the producers of tea, if they have a continuation of years like this, will be reduced in a short time to absolute ruin. Yet he makes all these statements about the Land Tax and distress in this country. There is distress in this country, and I cannot but remind my hon. Friend of how much of it is created by those who are suffering who might be exempted from the sufferings which they have enforced upon themselves.
I beseech my hon. Friend not to be drawn away by the ancient clap-trap about the breakfast table as if there were some particular merit about having a free breakfast. I would much rather have a free lunch or a free dinner. Unless my hon. Friend is going to escape all taxation of every sort he must make up his mind to pay his little bit upon the tea and not put still more on the breaking back of the Income Tax payer. There is no way out of it. I would suggest that some of that tenderness displayed over there just now towards Java should be transferred to the Empire producers of tea and our Indian fellow subjects to whom the industry gives employment. Let us have a little general good feeling and not anything savouring of spiteful discrimination against a product grown in British territory,
by British capital and consumed by British stomachs. I do not understand this kind of sympathy with Java for instance—the Dutch—as if we did not understand that,
In matters of commerce, the fault of the Dutch
Is in giving too little and asking too much.
I would suggest to my hon. Friend in perfect good faith and good temper and good feeling that this foolhardy Resolution might be buried this year and resuscitated some year when there is a little more prosperity not only for the people of this country, but also for those who are working at a loss to supply us with tea.

Mr. W. GRAHAM: I am sure the House has enjoyed the speech to which we have just listened. But hon. Members will admit that the subject demands a little more serious attention than apparently the hon. Member is prepared to give to it.

Sir J. D. REES: May I ask my hon. Friend whether he thinks that sincerity is synonymous with solemnity?

Mr. GRAHAM: Not in the least. Personally I enjoyed the speech thoroughly, but it is difficult for some of us, even though we may appreciate humour in every form, to fail to realise the pressure of indirect taxation at present upon the poor of this country. It is true that this tea duty has been debated in this House over and over again.

Sir F. LOWE: Every Session.

Mr. GRAHAM: It is also true that we are confronted every year with the duty of trying to ascertain what exactly is the burden of direct and indirect taxation. The hon. Member for Oxford (Mr. Marriott) appeared to suggest that we on this side proposed that people of a certain class should pay no indirect or indeed any taxation at all. We make no proposal of that kind. Many of us argue that we should bring direct taxation within the reach of practically every member of the community for the purpose of getting that stability in the State which very often it is difficult to get at present, and also for the purpose of bringing home to individuals some sense of responsibility so far as national organisation is concerned. But we have always tried to do that in a direct way. Do not widen indirect taxation, of which the tea duty
is one illustration, and above all, every year when the Budget comes along try to look at the circumstances which confront the people when you are imposing a fresh or continuing an old burden so far as they are concerned.
I suggest that it is relevant at present to appeal to the Chancellor of the Exchequer in the light of existing conditions in this country. There are many millions of people unemployed, or partly employed. There is no doubt that the burden of indirect taxation, according to every expert who has investigated the problem, is very heavy indeed in many homes in the country. Let it be admitted that where wages are coining down, in terms of the sliding scale based on the cost of living, a part of the argument for a remission of these duties will tend to disappear. Apart from any argument of that kind, there are millions of homes which have suffered substantial loss which have very little hope of recovery in the near future. In times like these it becomes a kind of national investment to ascertain whether you cannot remit a little of our indirect taxation. We are immediately asked where are we to find the money? I suggest that it will be possible this afternoon to remit a considerable part of the Tea Duty, not by imposing any kind of extra taxation, but by merely calling upon the direct taxpayer under the Income Tax laws as they now stand to do their duty by the State.
Experts have pointed out that we are losing at least from £5,000,000 to £10,000,000 a year by the evasion of Income Tax and other burdens of that kind. I think personally from all the investigations that have been made that we are losing a great deal more. Would it be too much to suggest that we might remit a very large portion of this Tea Duty and make that go as far as we can by asking these direct taxpayers to do their duty, which, after all, is a measure of justice to the other direct taxpayers, and so provide the money which is necessary? If we do not try in the present grave social emergency to ease this burden of indirect taxation we are simply going to pay for impaired physique and lower efficiency by all manner of local assessments and public measures of other kinds which I think, in part, this country would have avoided by remitting a little of our indirect taxation. I suggest respectfully that therein lies some method of dealing with this question
and giving a little social ease in these difficult times.

Sir R. HORNE: I do not propose to dissent from what my hon. Friend opposite has said in his speech to the Committee with regard to the burden which the Tea Duty imposes upon a large section of the community. Quite candidly if I were in a position to propose a reduction of the Tea Duty I would have done so. I am entirely in agreement with those who desire to reduce so far as possible the burden which falls upon those who to-day are suffering privation owing to the depressed conditions of trade and the high cost of living. I have made inquiry as to the difference which a full remission of the tax upon tea would make on the figures of the cost of living, and I find that on the 125 per cent. by which the pre-War cost of living is now exceeded the shilling Tea Duty would make a difference of only four points. Therefore, it cannot be said that it assumes any very large proportions. While agreeing with the general proposition that it would be better to have a lower duty upon tea—you can never remit it altogether—I do not at all accept the statement that the burden has been steadily increased on the "bottom dog" while relief has been given in the case of those who are better off. A moment's scrutiny of the actual figures of direct and indirect taxation will show that that is a complete misapprehension. Go back no further than 1905. You will find that the taxation then raised in this country was practically half and half by direct and indirect taxation. Direct taxation, however, gradually increased up to the point at which the War broke out. It increased still more during the War, and to-day, of the whole taxation of the country, 62.3 per cent. is paid by direct taxation and only 37.7 per cent. paid by indirect taxation.

Mr. SPENCER: Is the right hon. Gentleman including Excess Profits Duty as direct taxation?

Sir R. HORNE: No, I am leaving it out entirely. I wish to reply still further upon the particular point made as to the action said to be taken by this Government in relieving other people and not relieving the working class who pay the Tea Duty. An hon. Member said, "You have relieved Excess Profits Duty." Excess Profits Duty
would to-day be yielding very little, if anything at all. If the hon. Member studies the Amendments to this Bill on the Paper, he will find that the Amendments with regard to Excess Profits Duty are designed, not to closing it down sooner, but to continuing it to a later period. Why? Because people have been realising such enormous losses in recent times that they wish to put them against the taxes they paid previously. Accordingly, so far from Excess Profits Duty being in that sense a relief to the community, in point of fact, if the State had carried it on there would have been a loss to the Exchequer. My hon. Friend referred also to Land Duties. The explanation is simple. They were costing more than they were yielding. Neither of these things can be called, in any sense, a relief to the rich. I come to the critical point of the whole matter. This Tea Duty yields £16,000,000 a year. If I were to surrender it, it would cost £12,000,000 this year and £16,000,000 in a full year. Quite frankly, I cannot afford to do it. The hon. Member for Central Edinburgh (Mr. W. Graham) has put forward a suggestion that we might do something in mitigation of the duties, but he did not agree that the Tea Duty should be taken off altogether. He suggested filling up the gap by taking means to prevent a certain amount of evasion of Income Tax which goes on now. I entirely agree with him that we must take means to collect all the tax which is due. We must take far more stringent measures to prevent the evasion which undoubtedly goes on. As he said, it is due to the other taxpayers of the country that we should take that action. But it is obvious that we cannot do it this year. So far as the present year's Budget is concerned, we should gain no relief from taking any such measure as he suggested. That task lies before us. Accordingly, for this year his suggestion affords no relief at all. In all the circumstances, I am sure the Committee will well understand that it is impossible for me to accept the Amendment.

Mr. T. GRIFFITHS: I was surprised to hear the Chancellor of the Exchequer say that he could not take any steps this year to deal with those people who evade Income Tax.

Sir R. HORNE: The hon. Member must not misunderstand what I said. The hon. Member for Central Edinburgh understands me. We take every means at our disposal at the present time, and we use it to the utmost, but it is the exceptional measures being considered by the Royal Commission to which my hon. Friend referred.

Mr. GRIFFITHS: Is it not possible for the Chancellor of the Exchequer to put some kind of Resolution in the present Finance Bill? Let it be clearly understood that working men know that this evasion is going on. They themselves are checked and scrutinised very carefully in the offices and by the supervisors in the different districts, and they have no opportunity of evading Income Tax. We know that there is a great deal of evasion in so far as the—

Mr. INSKIP: On a point of Order. Is it in order to discuss evasion of the Income Tax on this Amendment?

Mr. GRIFFITHS: We have made a suggestion that the Tea Tax be reduced and that the money be found from another source.

The DEPUTY-CHAIRMAN (Sir E. Cornwall): Of course, it will not be in order to develop an argument as to the extent to which evasion takes place, because that might lead to a very wide discussion.

Mr. GRIFFITHS: I suppose I shall have to avail myself of another opportunity. I shall make one other suggestion. I was just having tea with an hon. Member who has a great amount of money invested in War Stocks, and he pointed out to me that—

The DEPUTY-CHAIRMAN: The hon. Member is pursuing that argument.

Mr. GRIFFITHS: I will say no more at present.

Major BARNES: According to the figures given to us, it would appear as if the proportion of direct taxation had increased a little as a result of the War, and that the figure for indirect taxation was really higher in proportion after the War than before.

Sir R. HORNE: I said that the percentage figure of direct taxation had increased steadily from 1905 to the time when the War broke out, and still more since then.

Major BARNES: I understood the Chancellor of the Exchequer's contention to be that the percentage figure of direct taxation had increased for the period he mentioned and had increased from the period before the War to the present time, and that relatively speaking, with regard to indirect taxation, it was higher than before. [HON. MEMBERS: "No!"] I want to get it clear. I understood that, relatively speaking, direct taxation is greater than it was before the War, and that, therefore, indirect taxation is less than it was before the War. I think that view is a fallacious view, because it takes into account only one side of the balance sheet. You are thinking only about revenue; you are not thinking about expenditure. When you come to look at the expenditure side the real position is that the wealthy classes of this country at the present time are not contributing at all to the cost of government. It is a misconception that they are doing so. The view is very firmly held, particularly by the right hon. Baronet (Sir F. Banbury), but if you take the revenue side and the expenditure side and compare the position before the War with the position after the War, you will find that what I have said is correct.
Take the position before the War. I will give the 1913 figures. You had indirect taxation before the War of £88,000,000. That came, roughly speaking, from the wealthy classes of the country. Before the War you paid on your debt service £24,500,000. That, roughly, went back to the same people. You had left in your possession, as Chancellor of the Exchequer, a sum of something like £63,000,000 of balance, with which to carry on. What is the position to-day? On the current year, excluding Excess Profits Duty, you are getting something like £521,000,000, as against £88,000,000, an enormous increase. No wonder the direct taxpayer thinks there has been a tremendous jump, and on those figures there has been. But look at the other side of the book. What are you paying on your debt service? The provision for debt service is £345,000,000 for interest and sinking fund, and £177,000,000 for reduction, a total of £522,000,000. So that if you take both sides of your account into consideration you are getting £521,000,000 and you are sending back to the same class £522,000,00. If you could cancel the two you would be £1,000,000 better off.

Sir F. BANBURY: Does not the hon. and gallant Gentleman see that for that interest there has been received an enormous sum of money?

Major BARNES: I can see the right hon. Baronet's point. I realise that somehow or other £6,000,000,000 was found. As far as my information goes, I do not understand that foreign investments are any less than they were. [HON. MEMBERS: "Yes."] I know that that is a common impression. But if the Chancellor of the Exchequer will make himself familiar with a return of the Department he has just left and take the figures presented in the statistical abstract as being the value of foreign investments for Income Tax purposes and compare those figures with the 1913 figures, he will find that what I say is right. That is a matter of fact. [HON. MEMBERS: "No, no."] I have made my statement, and it is open to anybody to get facts to controvert it. Somehow or other there is a first charge on this country of £600,000,000 held by somebody. That is the result of the War. The effect of that is to put the balance sheet in an entirely different position from what it was before the War and substantiates the case for some reduction in direct taxation. I know it is equally true that a very considerable amount of money is being spent on beneficial services more than before the War. In 1913 something like £40,000,000 was spent on education, old age pensions, labour exchanges, and other services of that kind. [HON. MEMBERS: "Order order!"]

Sir H. CRAIK: On a point of Order. Is this at all relevant to the Question before the House?

The DEPUTY-CHAIRMAN: I have been wondering myself. I heard the Chancellor of the Exchequer speak, and he gave the amount of indirect taxation and the amount of direct taxation. Hon. Members are entitled to reply to that, but they are not entitled to cover the whole ground of the taxation of the country. I think the hon. Member, in this case, is going too far.

Major BARNES: I am submissive to your ruling. I quite understand that these figures are not as well appreciated on the other side of the House as they are on this side. If this is not the proper place and time to produce them perhaps some other opportunity will be afforded of which I shall be glad to take
advantage. I was endeavouring to take this percentage figure which is being bandied from one side of the House to the other and to show how it is really arrived at. I think I have made my point that if in dealing with the question of indirect taxation you take into account not only revenue, but expenditure, the presence of the great War debt entirely alters the incident of it. In reference to the matter with which we are directly concerned, the revenue from tea, which was a little over £6,000,000 in 1913, has increased to over £16,000,000 in the present year. What in the old days we called breakfast table duties—sugar, tea, cocoa, coffee, and chicory—have increased in that period from £10,000,000 to £53,000,000. The Chancellor says that the effect of this Amendment would be to create a charge of something like £12,000,000 on the present year which he cannot meet. If he cannot meet it, he is responsible for that fact more than any other Member in this House, because that £12,000,000 might have been got out of the money which we have had to pay in connection with the coal stoppage. There is a direction in which money might have been saved. The remission of Excess Profits Duty is in fact a remission of direct taxation which is proved by the fact that, although Excess Profits Duty has gone, the return on Income Tax is expected to be greater. That shows that what originally came to the Government in Excess Profits Duty is now going into income. The House has always regarded it as necessary that every reduction in direct taxation should be balanced by a corresponding reduction in indirect taxation. That is all we are asking for. The effect of this Amendment will be to wipe out all the duty on tea, and if the Chancellor cannot afford that he might meet us in some way. Last night the House gave a Second Reading to a Bill which is going to reduce the unemployment allowance by 5s. [HON. MEMBERS: "Order, order! "] Hon. Members opposite are extremely sensitive. I am entitled to use arguments in making an appeal. We are asking on this side for something that will reduce the cost of living, and I am pointing out that last night you went a long way towards reducing the means of living. If the Chancellor can see his way to give some reduction in respect of this particular
duty, he will be doing something to mitigate the hardship which the House is—I believe very unwillingly—going to impose upon the people of this country. I do not regard the Members who voted for the Second Reading of that Bill as not being humane, but they are inflicting great hardship in doing what they feel to be their duty.

The DEPUTY-CHAIRMAN: The hon. Member is now discussing what took place in the House yesterday. I must ask him to be more relevant.

Mr. SPENCER: Whatever may be said with regard to the proportion of direct taxation as against indirect taxation the one outstanding fact is that since the year 1913–14 indirect taxation has risen out of all proportion to the income of the people. In that year it was £75,000,000, and in 1920–21 it was £348,650,000. That is an increase of 400 per cent. and the wages of the working class out of which they have to meet that increase have gone up somewhere in the region of 100 per cent. It will be admitted that as far as indirect taxation is concerned the impost is borne chiefly by the working classes. This particular tax on tea is one which affects the food of the people, and here we find an increase altogether disproportionate to the means of the people. As the hon. Member for Newcastle (Major Barnes) has pointed out, we were paying so far as food is concerned, about £10,000,000 in taxes in 1913–14 and now the impost upon food is £53,000,000. I maintain that impost is out of all proportion to the ability of the people to pay. The hon. Member for Oxford (Mr. Marriott) referring to Members on this side of the House said we were desirous of avoiding all forms of taxation, that we paid very little taxation except indirect taxation and that this was an attempt to get rid of the burden on ourselves and transfer it to somebody else. We have no desire whatever to escape our legitimate share of the financial burden of the country. One reason why we oppose a tax of this character is because it admits of no discrimination. If there were some form of discrimination in regard to this and other taxes so that they could be proportioned according to the ability of of the people to pay there would be no fault to find so long as taxation was not imposed in those cases where the imposition would affect the physical well-being
of the people. It is not only right financially but it is right morally that regard should be had to people who have only slender incomes which provide them with the bare physical means of existence. That is our stand. Beyond that we admit that whether it is the miner, or the man in the textile industry, or the engineer that above a certain point it should be agreed upon that all should contribute directly to the revenue. In this particular instance the taxation is not levied according to that principle. The idea of it is that out of the people's poverty they must contribute something to the revenue. At the same time that we are asking people to do that we are going to take from them part of the slender sum we have contributed to the relief of their distress. I hope the Minister will give a

sympathetic ear to the plea that we make on behalf of those who are destitute. If he wants to institute a more scientific system of taxation which will apportion the burden according to the ability of all to pay we on our part are prepared for a graduated income tax, but taxation of this kind will always receive our strongest condemnation. Whether we succeed or fail, whether this be regarded as a foolhardy annual or not we shall press for this relief, and some day these methods of taxation will be swept away altogether and a more scientific method take their place.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 199; Noes, 69.

Division No. 168.]
AYES.
[5.45 p.m.


Addison, Rt. Hon. Dr. Christopher
Davies, Thomas (Cirencester)
Johnstone, Joseph


Adkins, Sir W. Ryland D.
Davison, Sir W. H. (Kensington, S.)
Jones, Sir Evan (Pembroke)


Agg-Gardner, Sir James Tynte
Dawes, James Arthur
Jones, J. T. (Carmarthen, Llanelly)


Ainsworth, Captain Charles
Denniss, Edmund R. B. (Oldham)
Kelley, Major Fred (Rotherham)


Allen, Lieut.-Colonel William James
Dockrell, Sir Maurice
Kidd, James


Ashley, Colonel Wilfrid W.
Doyle, N. Grattan
King, Captain Henry Douglas


Bagley, Captain E. Ashton
Du Pre, Colonel William Baring
Lane-Fox, G. R.


Baldwin, Rt. Hon. Stanley
Elliot, Capt. Walter E. (Lanark)
Law, Alfred J. (Rochdale)


Balfour, Rt. Hon. A. J. (City of Lon.)
Eyres-Monsell, Com. Bolton M.
Lewis, Rt. Hon. J. H. (Univ., Wales)


Balfour, George (Hampstead)
Falle, Major Sir Bertram Godfray
Lloyd-Greame, Sir P.


Banbury, Rt. Hon. Sir Frederick G.
Fell, Sir Arthur
Loseby, Captain C. E.


Barnston, Major Harry
FitzRoy, Captain Hon. Edward A.
Lowther, Major C. (Cumberland, N.)


Barrand, A. R.
Flannery, Sir. James Fortescue
Lowther, Maj.-Gen. Sir C. (Penrith)


Beauchamp, Sir Edward
Foreman, Sir Henry
M'Donald, Dr. Bouverie F. P.


Bell, Lieut.-Col. W. C. H. (Devizes)
Forestier-Walker, L.
Macdonald, Rt. Hon. John Murray


Bellairs, Commander Carlyon W.
Forrest, Walter
Mackinder, Sir H. J. (Camlachie)


Bennett, Sir Thomas Jewell
Foxcroft, Captain Charles Talbot
McLaren, Robert (Lanark, Northern)


Betterton, Henry B.
Gange, E. Stanley
McMicking, Major Gilbert


Bigland, Alfred
Gardiner, James
McNeill, Ronald (Kent, Canterbury)


Birchall, Major J. Dearman
Geddes, Rt. Hon. Sir E. (Camb'dge)
Macpherson, Rt. Hon. James I.


Bird, Sir A (Wolverhampton, West)
Gee, Captain Robert
Macquisten, F. A.


Bird, Sir William B. M. (Chichester)
Gibbs, Colonel George Abraham
Magnus, Sir Philip


Borwick, Major G. O.
Gilbert, James Daniel
Maitland, Sir Arthur D. Steel-


Bowyer, Captain G. W. E.
Gilmour, Lieut.-Colonel Sir John
Malone, Major P. B. (Tottenham, S.)


Boyd-Carpenter, Major A.
Grant, James Augustus
Marriott, John Arthur Ransome


Brittain, Sir Harry
Green, Albert (Derby)
Martin, A. E.


Brown, Major D. C.
Green, Joseph F. (Leicester, W.)
Matthews, David


Buchanan, Lieut.-Colonel A. L. H.
Greenwood, Colonel Sir Hamar
Molson, Major John Elsdale


Buckley, Lieut.-Colonel A.
Greenwood, William (Stockport)
Moreing, Captain Algernon H.


Bull, Rt. Hon. Sir William James
Greig, Colonel James William
Munro, Rt. Hon. Robert


Burdon, Colonel Rowland
Gretton, Colonel John
Murray, William (Dumfries)


Butcher, Sir John George
Gritten, W. G. Howard
Neal, Arthur


Campbell, J. D. G.
Hacking, Captain Douglas H.
Newman, Sir R. H. S. D. L. (Exeter)


Cautley, Henry Strother
Hannon, Patrick Joseph Henry
Nicholson, Reginald (Doncaster)


Cecil, Rt. Hon. Evelyn (Birm., Aston)
Harris, Sir Henry Percy
Nicholson, William G (Petersfield)


Chadwick, Sir Robert Burton
Hennessy, Major J. R. G.
Nield, Sir Herbert


Chamberlain, Rt. Hon. J. A.(Birm., W.)
Henry, Denis S. (Londonderry, S.)
Ormsby-Gore, Hon. William


Chamberlain, N. (Birm., Ladywood)
Herbert, Col. Hon. A. (Yeovil)
Pearce, Sir William


Cheyne, Sir William Watson
Herbert, Dennis (Hertford, Watford)
Pease, Rt. Hon. Herbert Pike


Clough, Robert
Hewart, Rt. Hon. Sir Gordon
Peel, Col. Hn. S. (Uxbridge, Mddx.)


Coates, Major Sir Edward F.
Hills, Major John Waller
Percy, Lord Eustace (Hastings)


Coats, Sir Stuart
Hinds, John
Pinkham, Lieut.-Colonel Charles


Cockerill, Brigadier-General G. K.
Hoare, Lieut.-Colonel Sir S. J. G.
Prescott, Major W. H.


Cohen, Major J. Brunei
Holbrook, Sir Arthur Richard
Pretyman, Rt. Hon. Ernest G.


Colfox, Major Wm. Phillips
Hope, Sir H.(Stirling & Cl'ckm'nn,W.)
Purchase, H. G.


Coote, Colin Reith (Isle of Ely)
Hopkins, John W. W.
Raeburn, Sir William H.


Cope, Major William
Horne, Sir R. S. (Glasgow, Hillhead)
Ratcliffe, Henry Butler


Cowan, D. M. (Scottish Universities)
Hotchkin, Captain Stafford Vere
Raw, Lieutenant-Colonel Dr. N.


Cowan, Sir H. (Aberdeen and Kinc.)
Hunter-Weston, Lieut.-Gen. Sir A. G.
Rawlinson, John Frederick Peel


Craig, Capt. C. C. (Antrim, South)
Hurst, Lieut.-Colonel Gerald B.
Rees, Capt. J. Tudor- (Barnstaple)


Craik, Rt. Hon. Sir Henry
Inskip, Thomas Walker H.
Renwick, George


Croft, Lieut.-Colonel Henry Page
James, Lieut.-Colonel Hon. Cuthbert
Roberts, Samuel (Hereford, Hereford)


Curzon, Captain Viscount
Jephcott, A. R.
Roberts, Sir S. (Sheffield, Ecclesall)


Rodger, A. K.
Stewart, Gershom
Winfrey, Sir Richard


Roundell, Colonel R. F.
Sturrock, J. Leng
Wise, Frederick


Samuel, A. M. (Surrey, Farnham)
Sugden, W. H.
Wolmer, Viscount


Sanders, Colonel Sir Robert Arthur
Surtees, Brigadier-General H. C.
Wood, Hon. Edward F. L. (Ripon)


Seager, Sir William
Taylor, J.
Wood, Sir H. K. (Woolwich, West)


Seddon, J. A.
Thomson, F. C. (Aberdeen, South)
Yate, Colonel Sir Charles Edward


Shaw, Hon. Alex. (Kilmarnock)
Wallace, J.
Yeo, Sir Alfred William


Shaw, Capt. William T. (Forfar)
Walton, J. (York, W. R., Don Valley)
Young, E. H. (Norwich)


Simm, M. T.
Ward, Col. L. (Kingston-upon-Hull)
Young, W. (Perth & Kinross. Perth)


Sprot, Colonel Sir Alexander
Watson, Captain John Bertrand
Younger, Sir George


Stanler, Captain Sir Beville
Wheler, Col. Granville C. H.



Stanley, Major Hon. G. (Preston)
White, Col. G. D. (Southport)
TELLERS FOR THE AYES.—


Stanton, Charles Butt
Williams, C. (Tavistock)
Colonel Leslie Wilson and Mr.


Steel, Major S. Strang
Wills, Lt.-Col. Sir Gilbert Alan H.
Parker.


Stephenson, Lieut.-Colonel H. K.
Wilson-Fox, Henry



NOES.


Acland, Rt. Hon. Francis D.
Hall, F. (York, W. R., Normanton)
Richardson, R. (Houghton-le-Spring)


Adamson, Rt. Hon. William
Hallas, Eldred
Roberts, Frederick O. (W. Bromwich)


Barker, G. (Monmouth, Abertillery)
Halls, Walter
Robertson, John


Barnes, Major H. (Newcastle, E.)
Hartshorn, Vernon
Rose, Frank H.


Benn, Captain Wedgwood (Leith)
Hayday, Arthur
Sexton, James


Bowerman, Rt. Hon. Charles W.
Hayward, Evan
Shaw, Thomas (Preston)


Bromfield, William
Hirst, G. H.
Short, Alfred (Wednesbury)


Brown, James (Ayr and Bute)
Hogge, James Myles
Sitch, Charles H.


Cairns, John
Irving, Dan
Spencer, George A.


Carter, W. (Nottingham, Mansfield)
John, William (Rhondda, West)
Spoor, B. G.


Davies, A. (Lancaster, Ciltheroe)
Jones, J. J. (West Ham, Silvertown)
Swan, J. E.


Davies, Alfred Thomas (Lincoln)
Kennedy, Thomas
Thomson, T. (Middlesbrough, West)


Edwards, C. (Monmouth, Bedwellty)
Kenyon, Barnet
Thorne, W. (West Ham. Plaistow)


Edwards, G. (Norfolk, South)
Kiley, James Daniel
Waterson, A. E.


Edwards, Major J. (Aberavon)
Lawson, John James
Wedgwood, Colonel Josiah C.


Edwards, Hugh (Glam., Neath)
Lunn, William
White, Charles F. (Derby, Western)


Finney, Samuel
Maclean, Nell (Glasgow, Govan)
Wignall, James


Galbraith, Samuel
Morgan, Major D. Watts
Wilkie, Alexander


Gillis, William
Murray, Dr. D. (Inverness & Ross)
Williams, Aneurin (Durham, Consett)


Glanville, Harold James
Myers, Thomas
Wilson, Rt. Hon. J. W. (Stourbridge)


Graham, R. (Nelson and Colne)
Newbould, Alfred Ernest
Wilson, W. Tyson (Westhoughton)


Graham, W. (Edinburgh, Central)
O'Grady, James



Grundy, T. W.
Parkinson, John Allen (Wigan)
TELLERS FOR THE NOES.—


Guest, J. (York, W.R., Hemsworth)
Rendall, Atheistan
Mr. Arthur Henderson and Mr. T.




Griffiths.

Colonel WEDGWOOD: I beg to move, to leave out the words,
Additional duties on dried fruit …8.
In all the recent Budget Debates we have not had a Division on this question of dried fruits, and I think we ought to emphasise our protest against this duty on food. In the Safeguarding of Industries Bill we are raising extensive additional duties on goods coming into this country, but even in that Bill all duties on foodstuffs are specially exempted, and I think a case ought to be made out by the Government for continuing these duties on food when even in their own Bill they exempt any such duties. The Government profess a desire to bring down the cost of living in this country, and here is an opportunity for them to do something definite in that direction. If we could get the duties off currants, and raisins, and figs, and prunes, and all the other dried fruits taxed under this Clause, it would do something to bring down the budget of the ordinary household, and at a time when wages are being reduced everywhere it becomes
additionally important that the actual out-of-pocket expenses of the household should be cut down too. We have had these duties on dried fruit for many years. We have recently admitted to the franchise the women of the country, and here is a change in taxation which could not fail to be very agreeable to the housekeepers, the women who run the households of this country. While we realise that this tax on fruit would mean a larger tax on large families than on small families, I will not go into these other questions, but will content myself with moving the omission of these duties and expressing my desire to have a Division on this subject, so that we may show the women of the country particularly who are the people in this House who are definitely prepared to reduce the household budget.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 205; Noes, 65.

Division No. 169.]
AYES.
[5.57 P.m.


Addison, Rt. Hon. Dr. Christopher
Geddes, Rt. Hon. Sir E. (Camb'dge)
Murray, William (Dumfries)


Adkins, Sir W. Ryland D.
Gee, Captain Robert
Neal, Arthur


Agg-Gardner, Sir James Tynte
Gibbs, Colonel George Abraham
Newman, Sir R. H. S. D. L. (Exeter)


Allen, Lieut.-Colonel William James
Gilbert, James Daniel
Nicholson, Reginald (Doncaster)


Ashley, Colonel Wilfrid W.
Gilmour, Lieut.-Colonel Sir John
Nicholson, William G. (Petersfield)


Bagley, Captain E. Ashton
Green, Albert (Derby)
Nield, -Sir Herbert


Baldwin, Rt. Hon. Stanley
Green, Joseph F. (Leicester, W.)
Ormsby-Gore, Hon. William


Balfour, George (Hampstead)
Greenwood, Colonel Sir Hamar
Parry, Lieut.-Colonel Thomas Henry


Banbury, Rt. Hon. Sir Frederick G.
Greenwood, William (Stockport)
Pearce, Sir William


Barnston, Major Harry
Greig, Colonel James William
Pease, Rt. Hon. Herbert Pike


Barrand, A. R.
Gretton, Colonel John
Peel, Col. Hon. S. (Uxbridge, Mddx.)


Beauchamp, Sir Edward
Gritten, W. G. Howard
Percy, Lord Eustace (Hastings)


Bell, Lieut.-Col. W. C. H. (Devizes)
Hacking, Captain Douglas H.
Pinkham, Lieut.-Colonel Charles


Bellairs, Commander Carlyon W.
Hamilton, Major C G C.
Pollock, Sir Ernest Murray


Benn, Capt. Sir I. H., Bart. (Gr'nw'h)
Hannon, Patrick Joseph Henry
Prescott, Major W. H.


Bennett, Sir Thomas Jewell
Harris, Sir Henry Percy
Pretyman, Rt. Hon. Ernest G.


Betterton, Henry B.
Hennessy, Major J. R. G.
Purchase, H. G.


Bigland, Alfred
Henry, Denis S. (Londonderry, S.)
Raeburn, Sir William H.


Birchall, Major J. Dearman
Herbert, Col. Hon. A. (Yeovil)
Ratcliffe, Henry Butler


Bird, Sir A. (Wolverhampton, West)
Herbert, Dennis (Hertford, Watford)
Raw, Lieutenant-Colonel Dr. N.


Bird, Sir William B M. (Chichester)
Hewart, Rt. Hon. Sir Gordon
Rawlinson, John Frederick Peel


Borwick, Major G. O.
Hills, Major John Waller
Rees, Capt. J. Tudor- (Barnstaple)


Boscawen, Rt. Hon. Sir A. Griffith-
Hinds, John
Renwick, George


Bowyer, Captain G. W. E.
Hoare, Lieut.-Colonel Sir S. J. G.
Richardson, Alexander (Gravesend)


Boyd-Carpenter, Major A.
Holbrook, Sir Arthur Richard
Roberts, Sir S. (Sheffield, Ecclesall)


Brittain, Sir Harry
Hood, Joseph
Rodger, A. K.


Brown, Major D. C.
Hope, Sir H. (Stirling & Cl'ckm'nn'n,W.)
Roundell, Colonel R. F.


Buchanan, Lieut.-Colonel A. L. H.
Hopkins, John W. W.
Samuel, A. M. (Surrey, Farnham)


Buckley, Lieut.-Colonel A.
Home, Sir R. S. (Glasgow, Hillhead)
Sanders, Colonel Sir Robert Arthur


Bull, Rt. Hon. Sir William James
Hotchkin, Captain Stafford Vere
Scott, A. M. (Glasgow, Bridgeton)


Burdon, Colonel Rowland
Hunter-Weston, Lieut.-Gen. Sir A. G.
Seager, Sir William


Butcher, Sir John George
Hurd, Percy A.
Seddon, J. A.


Campbell, J. D. G.
Hurst, Lieut.-Colonel Gerald B.
Shaw, Capt. William T. (Forfar)


Cecil, Rt. Hon. Evelyn (Birm., Aston)
Inskip, Thomas Walker H.
Simm, M. T.


Chadwick, Sir Robert Burton
James, Lieut.-Colonel Hon. Cuthbert
Sprot, Colonel Sir Alexander


Chamberlain, Rt. Hn. J. A. (Birm., W.)
Jephcott, A. R.
Stanier, Captain Sir Beville


Chamberlain, N. (Birm., Ladywood)
Johnstone, Joseph
Stanley, Major Hon. G. (Preston)


Cheyne, Sir William Watson
Jones, Sir Evan (Pembroke)
Stanton, Charles Butt


Clough, Robert
Jones, J. T. (Carmarthen, Llanelly)
Steel, Major S. Strang


Coates, Major Sir Edward F.
Kelley. Major Fred (Rotherham)
Stephenson, Lieut.-Colonel H. K.


Coats, Sir Stuart
Kidd, James
Stewart, Gershom


Cohen, Major J. Brunel
King, Captain Henry Douglas
Sturrock, J. Leng


Colfox, Major Win, Phillips
Lane-Fox, G. R.
Sugden, W. H.


Cope, Major William
Law, Alfred J. (Rochdale)
Surtees, Brigadier-General H. C.


Cowan, D. M. (Scottish Universities)
Lewis, Rt. Hon. J. H. (Univ., Wales)
Taylor, J.


Cowan, Sir H. (Aberdeen and Kinc.)
Loseby, Captain C. E.
Thomson, F. C. (Aberdeen, South)


Curzon, Captain Viscount
Lowe, Sir Francis William
Turton, Edmund Russborough


Davidson, J. C. C. (Hemel Hempstead)
Lowther, Maj.-Gen. Sir C. (Penrith)
Walton, J. (York, W. R., Don Valley)


Davies, Thomas (Cirencester)
Lyle, C. E. Leonard
Ward, Col. J. (Stoke-upon-Trent)


Davison, Sir W. H. (Kensington, S.)
M'Donald, Dr. Bouverle F. P.
Ward, Col. L. (Kingston-upon-Hull)


Dawes, James Arthur
Macdonald, Rt. Hon. John Murray
Watson, Captain John Bertrand


Denniss, Edmund R. B. (Oldham)
Mackinder, Sir H. J. (Camlachie)
Wheler, Col. Granville C. H.


Dewhurst, Lieut.-Commander Harry
McLaren, Robert (Lanark, Northern)
White, Col. G. D. (Southport)


Dockrell, Sir Maurice
M'Lean, Lieut.-Col. Charles W. W.
Williams, C. (Tavistock)


Doyle, N. Grattan
McMicking, Major Gilbert
Wills, Lt.-Col. Sir Gilbert Alan H.


Du Pre, Colonel William Baring
McNeill, Ronald (Kent, Canterbury)
Winfrey, Sir Richard


Edwards, Allen C. (East Ham, S.)
Macpherson, Rt. Hon. James I.
Wise, Frederick


Edwards, Hugh (Glam., Neath)
Macquisten, F. A.
Wolmer, Viscount


Edwards, Major J. (Aberavon)
Magnus, Sir Philip
Wood, Hon. Edward F. L. (Ripon)


Eyres-Monsell, Com. Bolton M.
Maitland, Sir Arthur D. Steel-
Wood, Sir H. K. (Woolwich, West)


Falle, Major Sir Bertram Godfray
Malone, Major P. B. (Tottenham, S.)
Yate, Colonel Sir Charles Edward


Fell, Sir Arthur
Marriott, John Arthur Ransome
Yeo, Sir Alfred William


FitzRoy, Captain Hon. Edward A.
Martin, A. E.
Young, E. H. (Norwich)


Flannery, Sir James Fortescue
Matthews, David
Young, W. (Perth & Kinross, Perth)


Foreman, Sir Henry
Mitchell, William Lane
Younger, Sir George


Forestier-Walker, L.
Molson, Major John Elsdale



Forrest, Walter
Moreing, Captain Algernon H.
TELLERS FOR THE AYES.—


Foxcroft, Captain Charles Talbot
Morris, Richard
Colonel Leslie Wilson and Mr.


Gange, E. Stanley
Morrison-Bell, Major A. C.
Perker


Gardiner, James
Munro, Rt. Hon. Robert



NOES.


Acland, Rt. Hon. Francis D.
Davies, A. (Lancaster, Clitheroe)
Grundy, T. W.


Adamson, Rt. Hon. William
Davies, Alfred Thomas (Lincoln)
Guest, J. (York, W. R., Hemsworth)


Barker, G. (Monmouth, Abertillery)
Edwards, C. (Monmouth, Bedwellty)
Hall, F. (York W.R., Normanton)


Barnes, Major H. (Newcastle, E.)
Edwards, G. (Norfolk, South)
Hallas, Eldred


Benn, Captain Wedgwood (Leith)
Finney, Samuel
Halls, Walter


Bowerman, Rt. Hon. Charles W.
Galbraith, Samuel
Hartshorn, Vernon


Bromfield, William
Gillis, William
Hayday, Arthur


Brown, James (Ayr and Bute)
Glanville, Harold James
Hayward, Evan


Cairns, John
Graham. R. (Nelson and Colne)
Hirst, G. H.


Carter, W. (Nottingham, Mansfield)
Graham, W. (Edinburgh, Central)
Hogge, James Myles




Irving, Dan
O'Grady, James
Thorne, W. (West Ham. Plaistow)


John, William (Rhondda, West)
Parkinson, John Allen (Wigan)
Walsh, Stephen (Lancaster, Ince)


Jones, J. J. (West Ham, Silvertown)
Rendall, Athelstan
Waterson, A E.


Kennedy, Thomas
Richardson, R. (Houghton-le-Spring)
Wedgwood, Colonel Josiah C.


Kenyon, Barnet
Roberts, Frederick O. (W. Bromwich)
White, Charles F. (Derby, Western)


Kiley, James Daniel
Robertson, John
Wignall, James


Lawson, John James
Sexton, James
Wilkle, Alexander


Lunn, William
Short, Alfred (Wednesbury)
Wilson, Rt. Hon. J. W. (Stourbridge)


Maclean, Neil (Glasgow, Govan)
Sitch, Charles H.
Wilson, W. Tyson (Westhoughton)


Morgan, Major D. Watts
Spencer, George A.



Murray, Dr. D. (Inverness and Ross)
Spoor, B. G.
TELLERS FOR THE NOES.—


Myers, Thomas
Swan, J. E.
Mr. Arthur Henderson and Mr. T.


Newbould, Alfred Ernest
Thomson, T. (Middlesbrough, West)
Griffiths.

Mr. KILEY: I beg to move to leave out the words
New import duties … 12.
6.0 P.M.
If the Committee accept this Amendment, the import duties of 33⅓ per cent. now levied on certain manufactured goods imported into this country will cease to be imposed. The Committee will recall that when these duties were imposed as a temporary War Measure, they were imposed, and were accepted by this House, on the distinct understanding that they were for temporary War purposes only, and the House was certainly led to believe by the then Chancellor of the Exchequer, Mr. McKenna, that they would cease to be imposed when the War necessity no longer occasioned their being imposed. I understand that the Chancellor of the Exchequer, in a debate which took place a short time ago, stated that the only reason which necessitated their retention was the fact that they brought in a certain amount of revenue, and from that point of view, and if that were the only point of view with which this Committee was concerned, doubtless there would be much to be said; but, on the other side, we have to consider what are the injurious results of the imposition of these taxes. Slightly under one-half of the total revenue realised represents a duty on component parts which are used for remanufacture. No one who knows anything at all about manufacturing will for a moment suggest that if a manufacturer is compelled, or finds it necessary or desirable, to import part of his material, and has to pay heavy taxation upon that, he is better equipped to meet the world's demands for his goods. When one realises that nearly half the total of this revenue is derived from that source, the Chancellor of the Exchequer should certainly give some thought as to the effect which the imposition of these duties is having upon trade as a whole.
It is not alone the actual articles concerned, but the Board of Customs have to go a good deal outside what was ever intended when these duties were imposed. The other day I came across an importer of furniture casters, who had had trouble with the Board of Customs. They would not. allow him to obtain possession of his case of casters until he gave a satisfactory assurance that he would account to His Majesty's Board of Customs for every caster sold to a pianoforte manufacturer. I mentioned, in a previous Debate, about an importer of magnifying glass who was compelled to give bonds that if he sold any of his glass to a lamp manufacturer who supplied motor car users with lamps, he must pay duty. This is one of the many difficulties which arise owing to the imposition of these duties. In the case of every package that is delivered at the docks, when it is known, or suggested, that there is a duty payable on that package or part of the package, it is taken possession of by the Custom House officers, and put into a bonded store, and it takes days and weeks to get that package cleared. In the meantime rent and other charges have got to be paid by the importer, so that not only is the manufacturer injured by the duty, but also by the delay in getting his goods and the additional expense incurred. These are some of the drawbacks of the imposition of these duties.
There is a far more important point, which has been raised several times during the discussions on these duties, to which, up to now, no satisfactory solution has been found, and that is the indirect effect which these taxes have upon the re-export of articles to which no process of manufacture is added. I refer to clocks, watches, and musical instruments imported into this country and re-exported. A case was brought under my notice only last week, where an application was made to His Majesty's Customs for a drawback on something like 200 different consignments of these goods,
which had been imported into this country and re-exported out of the country. An application was made for a drawback on those goods, but His Majesty's Customs, in their wisdom, were not satisfied that sufficient definite evidence was forthcoming to identify these goods as having paid the duty, and, therefore, the duty is not to be refunded. This sort of obstacle, to my own knowledge, is having a very serious effect upon the trade which we are so anxious to regain. Last year, I admit, the yield from these duties was very great, because of the vast importation of finished motor cars in the early part of the year. Owing to the dearth in cheap cars then, an enormous number were imported from America. They were at that time very badly needed, and they yielded a very large amount to His Majesty's Customs. But that was a temporary cause, and I think, if the Chancellor of the Exchequer has any figures at his disposal, he will tell us that at the present time that boom has passed away, and that his receipts to-day are very small indeed. Yet the duties are a source, not only of annoyance and trouble to those concerned, but they are having a very serious effect upon the manufacture and re-export of these articles. There are also some points of detail which could be dwelt upon, but, as the subject has been debated pretty often, and only a few weeks back, I will not pursue the matter in detail, although, if the Chancellor of the Exchequer desires it, I have plenty of material.

Captain W. BENN: We have had a good many Debates on this question, but, perhaps, I may remind the Committee of some of the leading facts in connection with these import duties. Let me, first of all, requote the positive assurance that was given by a former Leader of the House as to these duties when they were imposed. Speaking of the fear that these duties would lead to something else, the right hon. Member for Central Glasgow (Mr. Bonar Law), when Leader of the House, said:
Duties of this kind would never be continued under any circumstances when the War was over.
I think the Chancellor of the Exchequer should take some note of that, because, if words ever mean anything, that is a perfectly definite and specific pledge. Then I deeply regret that we have not got the
presence of the Minister of Health. We are always very glad to see him in these days: he adds so much light to the discussion. The Minister of Health spoke on these duties too, and he did not speak of them in the post-War period, but at the time of the War, when, in my opinion, there was some justification for them. He said:
The articles selected were ridiculous, the results were absurd, and the proposals would not achieve what was intended.
I am very sorry that it is not possible for him to be here with us to-day to explain what are the circumstances, now that the War is over, that have made the articles less ridiculous and the results less absurd.

Sir F. BANBURY: I have converted him.

Captain BENN: Circumstances have altered.

Sir F. BANBURY: No; I have converted him.

Captain BENN: That may be so. Then I would like to ask what is going to be the attitude in this matter of the Coalition Liberal party? The Division which is-going to take place will be a very important one. The Financial Secretary—I trust he will not go away for a moment or two—I remember that last year these duties so impressed him as being unnecessary that he most sturdily went into the Lobby in opposition to them. What are the circumstances that have happened in the twelve intervening months to alter his judgment as to their necessity? I do not know. I am firmly convinced that when he accepted the very important office which he now adorns he accepted it with the determination to uphold and spread in Government circles those views of which he was so sturdy an exponent on this side of the House. I trust the right hon. Baronet has not converted him.

Sir F. BANBURY: Perhaps.

Captain BENN: There may be no end to the good work which the right hon. Baronet does in this House! Then what about the hon. Member I see opposite who represents Montrose (Mr. Sturrock)? He is a very pertinacious speaker. When he gets up to speak he is not averse to fighting. I wonder what he will say when I give to the House this quotation. I
apologise for using this very strong language, which is certainly not at all congenial to me. He said:
These duties absolutely reek and stink of old-fashioned protection.
Surely the hon. Member cannot have any great love for supporting something which reeks and stinks, and I am quite sure that, after that speech, we shall have the advantage of his support. I read in the paper that at a largely attended meeting of the Coalition Liberals held yesterday—this refers to some time ago, a couple of years. [Laughter.] Does any hon. Gentleman who laughs suggest that the eternal principles held by the Coalition Liberal Members have changed in the brief period of two years? It is impossible! They are the only Liberal party. We have that on the assurance of one of the Patronage Secretaries whose duties are so light here that he is able to devote a good deal of his time to expounding these things in the country. He has told us that the Coalition Liberals are the only Liberals. I submit, therefore, that it is very material to this Debate to hear what the Coalition Liberals have to say and what they think about these duties.
Mr. George Lambert presided.
I am reading the names as they appear in the paragraph—
Mr. George Lambert presided. The meeting was to receive an account of an interview that a deputation appointed at the last meeting recently had with Mr. Austen Chamberlain on the subject of the retention of the Government duties embodied in the Budget of 1915. Certain suggestions were made, and Mr. Neal and other members—
I am sorry that the Parliamentary Secretary to the Ministry of Transport is temporarily absent—
also spoke, and the following resolution, moved by Mr. Gerald Prance, and seconded by Mr. Leng Sturrock, was carried, 'That this meeting deprecates the continuance of the import duties imposed by the Budget in 1915.' 
It is extremely disappointing when we have these healthy, virile, sturdy sentiments expressed in the Committee Room, that they are translated more actively in the Lobby. We are not receiving the support that we should like from that quarter. It is very disappointing, because the interdependence of the Coalition Liberals and the Protectionist party in
the Cabinet is essential for the maintenance of the Coalition. We have it that there is a Minister specially appointed, as I read in the paper yesterday, and to dislodge whom would bring the whole of the Coalition to the ground. He is there for the purpose of maintaining this sacred connection. So I hope I have made it quite clear that the action of the Coalition Liberal party, the only Liberal party, is really of most vital moment to the fiscal fortunes of our country.
One other point. Under this Clause of the Bill a duty of 33⅓ per cent. is put on a number of articles selected, so far as one can make out, quite at random, not from the point of view of yielding revenue at all. We must now look at this in the light of the further Bill which has been introduced, and is now before the House, for adding another 33⅓ per cent. I do not understand, as regards Part II of the Anti-Dumping Bill, that the duties are "in place of it," because it says in Clause (3) "in addition to any other duties and customs." What, therefore, we are really doing if we take this course to-day is to put a duty of 66 per cent. on these products.

Sir R. HORNE: Surely my hon. and gallant Friend must be fair. The duties which are provided for in the Safeguarding of Industries Bill do not necessarily go on.

Captain BENN: That really makes the case a thousand times worse, because the one thing the trader wants to know is what he has got to pay. Under the Safeguarding of Industries Bill and on account of the alteration of the exchanges, he may ultimately find himself involved in charges he never contemplated, and in that case there is very, very little to be said for Part I of the Safeguarding of Industries Bill. The real point is this: We are conferring upon the Treasury powers to impose duties which in the aggregate may amount to 99 per cent., and certainly in many cases to 66, without estimating the 26 per cent. extra to which reference has been made. I do once more suggest that if the Government is desirous of introducing Protection—we were told by the Leader of the House only the other night that both parts of the Coalition believe it is necessary and are completely in harmony—would it not be very much better if, instead of keeping this meaningless Protection of 33⅓ per cent., they should
not introduce frankly a tariff Bill and so let Free Traders and Protectionists alike know exactly what is proposed? If the Government justify such measure on the grounds of Protection and that there is such a thing as scientific interference with trade in the interests of their own country then we could understand; but to go on as they are doing, suggesting that it is in the interests of the Revenue and of the trade of the country, is not going to benefit either.

Sir R. HORNE: The hon. and gallant Gentleman opposite—[HON. MEMBERS: "Leng Sturrock!"]—I take it that the hon. Member for Montrose will have the opportunity later, if he thinks it necessary, to reply to what the hon. and gallant Gentleman opposite has said. The views which were expressed by the last speaker are those which we are accustomed to hear regularly in these Debates. The only new element which the hon. and gallant Gentleman has succeeded in bringing into his speech is a somewhat lively series of quotations from his old friends. They have separated from his party, and he very much regrets what has happened, and the band to which he belongs have lost some of their most skilled and the most erudite members. But it is really too late in the day now to discuss practical measures from the point of view of the old Free Trade and Tariff Reform controversy. It is an attempt to make what is really a matter of business a matter of religion on the part of my hon. Friends opposite. Some of them seem to think that the question of Protection or Free Trade must necessarily give rise to systems to every part of which you must be devoted, and every part of which you must put into definite application. For my part I have never been able to look upon the fiscal question as other than a practical matter of business. If a duty pays you and you can put it on without injuring your own people, you do a service to trade. Why not, then, apply it? If, on the other hand, there _is a balance of disadvantage, then we should not apply it. To talk, however, as if because you had one particular duty you must have a thousand others seems to me to be the height of fatuity. In regard to the means of raising revenue, I hope I shall never be led astray by that kind of complaint, or be led to pay attention to that which is not a
principle and never was intended to be, but, in fact, is merely a matter of business.
When I look at this particular duty, I find something which is really useful to the trade of the country. It does no injury to anybody, yet at the same time it produces revenue of £2,100,000, we hope, for the present year. We want money. Is it not far better that we should get that by the taxation of luxuries, none of which need affect the ordinary consumers of the country? If you look at the case of motor-cars: you tax luxury cars and not the commercial vehicles.

Captain BENN: What about commercial travellers?

Sir R. HORNE: You cannot go into the ultimate destination of the car when it arrives at the seaport, and you can therefore only deal with a car according to its class. Here you do get a revenue from a tax which injures nobody. The hon. Gentleman opposite (Mr. Kiley) alleged that half of the tax is taken from components. I am told that components are not a very large part at all. If my hon. Friend has any cases which he would like to bring before me, I shall be glad to have them inquired into, because we are anxious to make it as clear as possible that we do not desire to create difficulty. We do not think there is any real difficulty in the administration of the duty.

Mr. KILEY: I got the figures from the "Board of Trade Journal" about the component parts, and I can show them to the right hon. Gentleman.

Sir R. HORNE: I should be glad to see them. My hon. and gallant Friend's speech was concerned with a series of quotations and he regretted that the right hon. Gentleman the Member for Central Glasgow (Mr. Bonar Law) was not in his place. I am very sorry that the late Leader of the House is not in his place because he would have been able to inform my hon. and gallant Friend with more effect that what has just been quoted is a complete misrepresentation of the attitude which he then took up. So far from the speech being one which would be in favour of taking off these taxes after the War, it was to the opposite effect. When he spoke about nobody continuing duties on this scale after the War he really meant on that slight scale. I really do
not think that the hon. and gallant Gentleman can have read that speech.

Captain BENN: Yes, I have read it all.

Sir R. HORNE: Then the hon. and gallant Gentleman cannot have read it with his usual care and accuracy. The right hon. Gentleman in his speech said:
That is one of the strongest arguments, because obviously 33⅓ per cent. does not meet the case.
The right hon. Gentleman went on to say:
Duties of this kind would never have been continued when the War was over on this scale.
He meant that these duties would not meet the case if they attempted to set them up as a protective scale. If the right hon. Gentleman were here I am sure he would agree that in reality what we are doing is raising revenue for the State upon a particular set of commodities which are regarded as luxury commodities. There is another passage in the same speech, which my hon. and gallant Friend did not quote, in which my right hon. Friend said:
The only possible objection to their point of view is that the imposition of these duties would be an object lesson which will show after the War is over that they have not done harm but have done good.
His point was that these duties might form an illustration that you could have duties upon commodities not only without doing any harm, but doing good. I think it has been shown that these duties have done good and no harm, and for that reason I cannot accept the Amendment.

Major HAYWARD: The Chancellor of the Exchequer has drawn no distinction between the attitude of mind of himself and my hon. and gallant Friend (Captain Benn). The right hon. Gentleman says he regards this as a matter of business, while my hon. and gallant Friend, he says, regards it as one of religion. I think the Chancellor of the Exchequer is doing both himself and my hon. and gallant Friend an injustice, because I am sure he would be the last to deny that he himself does not allow principles of religion to influence him in his conduct of business. The right hon. Gentleman has drawn a distinction which really does not exist. He said that on the one hand he considered what was the revenue derived from these taxes, and on the other side whether that advantage was
overbalanced by countervailing disadvantages. That is precisely the test we apply, and our opinion is that the revenue he derives is more than counterbalanced by countervailing disadvantages. The Chancellor of the Exchequer has told us that the revenue he derives from these taxes is £2,100,000. I believe I am right in saying that as a matter of fact more than one-half of that amount is derived from one class of commodity only, and from one country only.
Some time ago the President of the Board of Trade was good enough to give a return showing the total value of the articles subjected to the new import duties which were imported into this country during the past few years, and according to those figures the total value for the year 1920 is £21,727,610. I believe the amount actually derived for the year 1920 showed an increase on the estimate for this year. The amount contributed by cinematograph films is just over £1,000,000. Clocks, complete and parts, produced over £1,000,000. Watches complete, watch cases and parts produced £2,287,000, and the amount contributed by motor cars, chassis and parts is £15,500,000. So that motor cars really cover a great deal more than half the total amount, and of that £15,500,000, £12,325,843 are imported from the United States of America. Apart from motor cars, the amount of revenue to be derived from these new import duties must be very small indeed. I put it to the Chancellor of the Exchequer whether it is worth while, for the small amount of revenue he derives from these other commodities, to put the commercial and industrial community to the great disadvantages which undoubtedly do occur owing to these taxes.

Mr. STURROCK: I am only anxious to allay the anxiety of my hon. and gallant Friend the Member for Leith (Captain Benn) by at once letting him know that it is my firm intention to support the Government. My hon. and gallant Friend has done me the honour of making a quotation from one of my speeches, and I feel highly honoured at being associated with the right hon. Gentleman the Member for Central Glasgow and other celebrities whom my hon. and gallant Friend thought it worth while to quote upon this subject. I confess freely to the Committee that I
can live and learn, while my hon. and gallant Friend is one of those firm politicians who never can alter his view point, and declares himself to be an advanced radical whilst I am a reactionary Conservative.
I make no apology for the words I used when one examines these duties, and looks back upon their operation. The hon. and gallant Member for Leith has been searching here, there, and everywhere for political ammunition to use in his constituency, and now he comes here wasting the time of the Committee by attempting to oppose duties on luxuries like motor cars, clocks and mouth organs. We now see the small rump of dissentient Liberals occupied in the pleasant task of opposing duties on what really are luxuries. That is not the Gladstonian Liberalism in which I was born. I ask my hon. and gallant Friend to withdraw his opposition to these duties, having in view the present state of the finances of the country. [HON. MEMBERS: "Why?"] Simply because there is no justification for robbing the Treasury of money that is very seriously needed. Only yesterday my hon. and gallant Friend demanded that the Minister of Labour should not alter the unemployment pay, and on that occasion he was anxious to spend more money; but to-day he and his friends come here, and try to rob the Government of some of the money which it needs so badly.

The CHAIRMAN: I think the hon. Member is getting wide of the Question before the Committee.

Mr. STURROCK: I have only done so, Mr. Chairman, under the provocation of having my speeches quoted by the hon. and gallant Member. The argument of the hon. and gallant Member for White-chapel (Mr. Kiley) is that we should sweep these duties away altogether, because there will be delays in connection with the Customs authorities. Does he propose that the whole revenue should go because there may be delays? I never heard a more feeble argument. We want all the money we can get. Hon. Members know it, and if they come down here to oppose such duties as these, I think at any rate they ought to remain very mute when questions are put forward entailing expenditure on the part of the Government.

Mr. J. W. WILSON: As one who views this problem from a business rather than a religious point of view, may I say that we may expect that in the administration of the fiscal measures before us in another Bill I think I am justified in asking whether the duty on these goods of 33⅓ per cent. will run concurrently? Is there a possibility that in the case of some of these articles which are liable to 33⅓ per cent. they may be liable, if not by a direct Measure of Parliament, by the action of the Board of Trade, to another 33⅓ per cent. at least, and possibly more? Certainly, where motor cars, watches, or musical instruments come to us from countries with an adverse exchange, they might be claimed by the Board of Trade to come within the scope of their administrative powers. In whatever way one looks at these duties, from whatever aspect one has been accustomed to view them, we must all agree that the essential security for the encouragement of trade is a knowledge of what is to come. Uncertainty regarding trade, even for a few months ahead, is always a great deterrent to business, and I think it would be well if we are to assume from what the Chancellor of the Exchequer has told us that it is not the intention of the Government, or of any Department of the Government, that these duties should be cumulative, or, to use a legal phrase, that these sentences should run concurrently. If importers have reason to fear that the goods they deal in will be liable to a double duty it may prove a serious deterrent to trade.

Sir R. HORNE: I would remind my hon. Friend that the other Bill to which he has referred has not yet entered upon its Committee stage, and it does not seem right that in dealing with the Bill now before the House we should refer to another Bill as to which we do not know in what form it will leave the House. So far as the proposals of the Bill are concerned, any duties other than the key industries duties would only be imposed after inquiry by a Committee which would take all the circumstances into consideration. They might decide that if a duty already existed there could be no need for imposing any further duty. At the same time, it would be possible for them, as the Bill now stands, to make the duties cumulative.

Lord R. CECIL: What is the intention of the Government?

Mr. WILSON: I think I was justified in the question I put to the Chancellor of the Exchequer, especially in view of the words of Clause 3, "in addition to any other duty." I think we may expect the Government will favourably entertain some time in Committee a request that that point shall be made clear, and they might possibly reduce the discretion at present allowed to the Board of Trade. By so doing they would help to put more at ease the minds of certain people in the business community.

Sir R. HORNE: My right hon. Friend will have every opportunity of raising that question on the other Bill in Committee. I say it would be possible to have the two duties cumulative if the Committee dealing with the matter thought fit to put one on top of the other, but they would only do that having regard to all the circumstances of the time.

Mr. A. SHAW: I would like to remind the Committee that at the outset these duties were imposed in order to save shipping space. That was the origin of them. The character of them is perfectly obvious. The Chancellor of the Exchequer has spoken of them as an example of the small harm done; in fact, he rather seemed to claim that they had proved a benefit, but I want to point out that they are rather an illustration of the fact that when once insidious protectionist taxes have been inserted into our system it becomes lmost impossible to get rid of them. We are led from one article to another until we reach a system of protection on a large scale, and we find it impossible to get rid of a measure which is essentially vicious. I quite admit that my hon. Friend the Member for Montrose (Mr. Sturrock) is perfectly entitled to change his mind, but I much regret that he should have gone so far as to decide to go into the Lobby against this Amendment.

Mr. T. THOMSON: Those of us on this side who intervene in the family differences which have broken out on the opposite Benches need not apologise if we claim that the principles on which business experience in the past has been built up are perfectly sound, and if we still hold that what has led to the great business prosperity of this as a manufacturing and importing country has been the application of those very principles which the Chan-
cellor of the Exchequer now seems to think he is deriding when he describes them as some form of religion. If there is one thing for which the business world to-day is asking it is to be rid of the restrictions imposed durng the War, restrictions which were willingly borne at the time, but which, now that the necessity has passed, ought to be removed. The hon. Member for Montrose (Mr. Sturrock) suggested that they should be regarded as luxury taxes for revenue purposes. Why not make it a real luxury tax? Why not include diamonds, and pearls, and all kinds of jewels? Why not put your luxury tax on these things rather than tax the schoolboy's watch which can hardly be counted as a luxury, because the watch-making industry in this country is largely specialised on the higher classes of trade and not on the cheap class of watches such as we get from abroad. Really, instead of making it a luxury tax you are taxing the workman and the schoolboy and compelling them to pay much more for their watches than you ought to.
I come to the question of musical instruments. Many men not very well paid earn their daily livelihood by using these instruments, and upon them you will put a very heavy burden. They may be but a small class of the community, but still they do deserve some consideration. I submit that those principles which have proved sound and satisfactory from a business point of view should be maintained. The trading community desire freedom to manage their own affairs in their own way without restrictions artificially imposed by the bureaucracy. In a Committee upstairs to-day the right hon. Gentleman in charge of the Government Railway Bill declared that freedom of competition was the very life of our railway services. Surely freedom of competition is equally necessary in those larger spheres of commerce with which this Bill is more particularly concerned. I do not think, therefore, there is any need for any of us to apologise because we have not changed our principles. We hold to the old faith upon which the prosperity of this country has been built up, and we believe that that prosperity will be renewed if we only give it a fair chance.

Dr. MURRAY: I should like to sympathise with the hon. Member for the Montrose Burghs (Mr. Sturrock) in the
savage attack made upon him by the hon. and gallant Member for Leith (Captain W. Benn), and I think he did well to be angry at it. My hon. Friend lives and learns, so he tells us. He not only learns, but apparently he has discovered a royal road to learning. He said some very strong things only a few months ago, and to-day he spoke in an almost opposite direction. That is evidence that he has discovered a royal road to learning. The Chancellor of the Exchequer told us that we on this side regarded Free Trade as our religion. At any rate, we do not accept Protection as our religion, and, unfortunately, we are not in a position to practise our religion. The right hon. Gentleman apparently has accepted Protection as his religion, and now he can practise it. The late Leader of the House certainly never intended to impose a tariff of 33⅓ per cent. as a scientific tariff. The utmost he had in his mind was, I believe a 10 per cent. tariff, and he never imagined that any Government would after the War dream of putting on a 33⅓ per cent. tariff. The right hon. Gentleman just now spoke of motor cars as a luxury. I would like him to hear the opinions of some doctors who have to use motor cars in their daily practice, warring against all kinds of wind and weather in all parts of the country. Does he imagine that they look upon riding in a motor car as a luxury? And yet it is that very man who will be hardest hit if this 33⅓ per cent. tariff is imposed upon motor cars. My objection to this Bill is that the Government are producing a snowball of Protection. One tax is being piled upon another, and almost before we know where we are we shall

find every article we used taxed, and taxed to such an extent that it will be impossible to make use of them.

Mr. KILEY: I should like to give the Committee a little information which came to my knowledge only a few days ago as to the effect of these taxes upon trade. There is in the City a business firm which formerly was in the habit of doing a large re-export trade in Swiss watches. They were in the habit of sending them especially to East, West and South Africa, but after the War they found the repeat orders which they usually received had suddenly stopped, and it was not until some time later that they discovered that the Swiss manufacturer had been careful enough to put inside the boxes containing the goods his own name and address and the price at which he was able to do business with the African firms. This London firm as a result lost a large amount of its business. If the right hon. Gentleman will take the opportunity of looking to the export trade in pianos, he will find that in 1913 the trade in re-exported foreign made pianos in that year compared with what it is at the present time, was 90 per cent. greater. That is another proof of how trade is affected by these taxes, and if the right hon. Gentleman wants further information on that point I could give him many other illustrations of the very serious effects being produced on the export- trade of this country.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 194; Noes, 79.

Division No. 170.]
AYES.
[7.2 p.m.


Addison, Rt. Hon. Dr. Christopher
Bowyer, Captain G. W. E.
Cowan, Sir H. (Aberdeen and Kinc.)


Agg-Gardner, Sir James Tynte
Boyd-Carpenter, Major A.
Craig, Captain C. C. (Antrim, South)


Allen, Lieut.-Colonel William James
Breese, Major Charles E.
Craik, Rt. Hon. Sir Henry


Amery, Leopold C. M. S.
Bridgeman, Rt. Hon. William Clive
Davies, Thomas (Cirencester)


Ashley, Colonel Wilfrid W.
Brittain, Sir Harry
Davison, Sir W. H. (Kensington, S.)


Bagley, Captain E. Ashton
Buchanan, Lieut.-Colonel A. L. H.
Dawes, James Arthur


Baird, Sir John Lawrence
Buckley, Lieut.-Colonel A.
Denniss, Edmund R. B. (Oldham)


Balfour, George (Hampstead)
Bull, Rt. Hon. Sir William James
Dewhurst, Lieut.-Commander Harry


Balfour, Sir R. (Glasgow, Partick)
Butcher, Sir John George
Dockrell, Sir Maurice


Banbury, Rt. Hon. Sir Frederick G.
Campbell, J. D. G.
Doyle, N. Grattan


Barnston, Major Harry
Cautley, Henry Strother
Du Pre, Colonel William Baring


Bell, Lieut.-Col. W. C. H. (Devizes)
Cecil, Rt. Hon. Evelyn (Birm., Aston)
Elliot, Capt. Walter E. (Lanark)


Bellairs, Commander Carlyon W.
Chamberlain, Rt. Hn. J. A.(Birm., W.)
Eyres-Monsell, Com. Bolton M.


Bennett, Sir Thomas Jewell
Chamberlain, N. (Birm., Ladywood)
Falcon, Captain Michael


Betterton, Henry B.
Churchman, Sir Arthur
Falle, Major Sir Bertram Godfray


Bigland, Alfred
Clough, Robert
Fell, Sir Arthur


Birchall, Major J. Dearman
Coates, Major Sir Edward F.
FitzRoy, Captain Hon. Edward A.


Bird, Sir A. (Wolverhampton, West)
Coats, Sir Stuart
Flannery, Sir James Fortescue


Bird, Sir William B. M. (Chichester)
Colfox, Major Wm. Phillips
Ford, Patrick Johnston


Borwick, Major G. O.
Conway, Sir W. Martin
Forrest, Walter


Boscawen, Rt. Hon. Sir A. Griffith-
Cope, Major William
Foxcroft, Captain Charles Talbot


Fraser, Major Sir Keith
Locker-Lampson, G. (Wood Green)
Rawlinson, John Frederick Peel


Gange, E. Stanley
Locker-Lampson, Com. O. (H'tingd'n)
Rees, Capt. J. Tudor- (Barnstaple)


Gardiner, James
Lorden, John William
Richardson, Alexander (Gravesend)


Geddes, Rt. Hon. Sir E. (Camb'dge)
Loseby, Captain C. E.
Roberts, Sir S. (Sheffield, Ecclesall)


Gee, Captain Robert
Lowe, Sir Francis William
Rodger, A. K.


Gibb's, Colonel George Abraham
Lowther, Major C. (Cumberland, N.)
Roundell, Colonel R. F.


Gilbert, James Daniel
Lowther, Maj.-Gen. Sir H.C. (P'nrith)
Samuel, Samuel (W'dsworth, Putney)


Gilmour, Lieut.-Colonel Sir John
Lyle, C. E. Leonard
Sanders, Colonel Sir Robert Arthur


Goulding, Rt. Hon. Sir Edward A.
M'Donald, Dr. Bouverie F. P.
Sassoon, Sir Philip Albert Gustave D.


Gray, Major Ernest (Accrington)
Mackinder, Sir H. J. (Camlachie)
Scott, A. M. (Glasgow, Bridgeton)


Green, Albert (Derby)
McLaren, Robert (Lanark, Northern)
Shaw, Capt. William T. (Forfar)


Green, Joseph F. (Leicester, W.)
M'Lean, Lieut.-Col. Charles W. W.
Simm, M. T.


Greenwood, William (Stockport)
McMicking, Major Gilbert
Sprot, Colonel Sir Alexander


Greig, Colonel James William
McNeill, Ronald (Kent, Canterbury)
Stanier, Captain Sir Beville


Gretton, Colonel John
Macpherson, Rt. Hon. James I.
Stanley, Major Hon. G. (Preston)


Hamilton, Major C. G. C.
Macquisten, F. A.
Stanton, Charles Butt


Harris, Sir Henry Percy
Maitland, Sir Arthur D. Steel-
Steel, Major S. Strang


Hennessy, Major J. R. G.
Malone, Major P. B. (Tottenham, S.)
Stewart, Gershom


Henry, Denis S. (Londonderry, S.)
Marriott, John Arthur Ransome
Sturrock, J. Leng


Herbert, Col. Hon. A. (Yeovil)
Martin, A. E.
Sugden, W. H.


Herbert, Dennis (Hertford, Watford)
Matthews, David
Surtees, Brigadier-General H. C.


Hewart, Rt. Hon. Sir Gordon
Meysey-Thompson, Lieut.-Col. E. C.
Taylor, J.


Hills, Major John Waller
Molson, Major John Elsdale
Thomson, F. C. (Aberdeen, South)


Hoare, Lieut-Colonel Sir S. J. G.
Moreing, Captain Algernon H.
Thomson, Sir W. Mitchell- (Maryhill)


Holbrook, Sir Arthur Richard
Morrison, Hugh
Thorpe, Captain John Henry


Hood, Joseph
Morrison-Bell, Major A. C.
Tryon, Major George Clement


Hope, Sir H.(Stirling & Cl'ckm'nn, W.)
Munro, Rt. Hon. Robert
Turton, Edmund Russborough


Hopkins, John W. W.
Murray, John (Leeds, West)
Ward, Col. J. (Stoke-upon-Trent)


Horne, Sir R. S. (Glasgow, Hillhead)
Murray, William (Dumfries)
Watson, Captain John Bertrand


Hotchkin, Captain Stafford Vere
Neal, Arthur
Wheler, Col. Granville C. H.


Hunter-Weston, Lieut.-Gen. Sir A. G.
Newman, Sir R. H. S. D. L. (Exeter)
White, Col. G. D. (Southport)


Hurd, Percy A.
Nicholson, William G. (Petersfield)
Williams, C. (Tavistock)


Hurst, Lieut.-Colonel Gerald B.
Ormsby-Gore, Hon. William
Wills, Lt.-Col. Sir Gilbert Alan H.


Inskip, Thomas Walker H.
Palmer, Brigadier-General G. L.
Wise, Frederick


Jackson, Lieut.-Colonel Hon. F. S.
Parker, James
Wolmer, Viscount


James, Lieut.-Colonel Hon. Cuthbert
Pearce, Sir William
Wood, Hon. Edward F. L. (Ripon)


Jephcott, A. R.
Pease, Rt. Hon. Herbert Pike
Wood, Sir H. K. (Woolwich, West)


Jones, Sir Edgar R. (Merthyr Tydvil)
Peel. Col. Hon. S. (Uxbridge, Mddx.)
Yate, Colonel Sir Charles Edward


Jones, J. T. (Carmarthen, Llanelly)
Percy, Lord Eustace (Hastings)
Yeo, Sir Alfred William


Kelley, Major Fred (Rotherham)
Perkins, Walter Frank
Young, E. H. (Norwich)


Kidd, James
Pinkham, Lieut.-Colonel Charles
Younger, Sir George


King, Captain Henry Douglas
Pollock, Sir Ernest Murray



Lane-Fox, G. R.
Prescott, Major W. H.
TELLERS FOR THE AYES.—


Law, Alfred J. (Rochdale)
Pretyman, Rt. Hon. Ernest G.
Colonel Leslie Wilson and Mr.


Lewis, Rt. Hon. J. H. (Univ., Wales)
Purchase, H. G.
Dudley Ward.


NOES.


Acland, Rt. Hon. Francis D.
Hartshorn, Vernon
Richardson, R. (Houghton-le-Spring)


Adamson, Rt. Hon. William
Hayday, Arthur
Roberts, Frederick O. (W. Bromwich)


Asquith, Rt. Hon. Herbert Henry
Hayward, Evan
Robertson, John


Barker, G. (Monmouth, Abertillery)
Henderson, Rt. Hon. A. (Widnes)
Seager, Sir William


Bonn, Captain Wedgwood (Leith)
Hinds, John
Sexton, James


Bowerman, Rt. Hon. Charles W.
Hirst, G. H.
Shaw, Hon. Alex. (Kilmarnock)


Bromfield, William
Hogge, James Myles
Shaw, Thomas (Preston)


Brown, James (Ayr and Bute)
Holmes, J. Stanley
Short, Alfred (Wednesbury)


Cairns, John
Hopkinson, A. (Lancaster, Mossley)
Sitch, Charles H.


Carter, W. (Nottingham, Mansfield)
John, William (Rhondda, West)
Spencer, George A.


Clynes, Rt. Hon. John R.
Johnstone, Joseph
Spoor, B. G.


Coote, Colin Reith (Isle of Ely)
Jones, J. J. (West Ham, Silvertown)
Swan, J. E.


Cowan, D. M. (Scottish Universities)
Kennedy, Thomas
Thomson, T. (Middlesbrough, West)


Davies, A. (Lancaster, Clitheroe)
Kenyon, Barnet
Thorne, W. (West Ham, Plaistow)


Edwards, C. (Monmouth, Bedwelity)
Kiley, James Daniel
Wallace, J.


Edwards, G. (Norfolk, South)
Lawson, John James
Walsh, Stephen (Lancaster, Ince)


Finney, Samuel
Lunn, William
Waterson, A. E.


Galbraith, Samuel
Macdonald, Rt. Hon. John Murray
Wedgwood, Colonel Josiah C.


Gillis, William
Maclean, Neil (Glasgow, Govan)
White, Charles F. (Derby, Western)


Glanville, Harold James
MacVeagh, Jeremiah
Wignall, James


Graham, R. (Nelson and Colne)
Mills, John Edmund
Williams, Aneurin (Durham, Consett)


Graham, W. (Edinburgh, Central)
Morgan, Major D. Watts
Wilson, Rt. Hon. J. W. (Stourbridge)


Griffiths, T. (Monmouth, Pontypool)
Mosley, Oswald
Wilson, W. Tyson (Westhoughton)


Grundy, T. W.
Myers, Thomas
Young, Robert (Lancaster, Newton)


Guest, J. (York, W. R., Hemsworth)
Newbould, Alfred Ernest



Hall, F. (York, W. R., Normanton)
Nicholson, Reginald (Doncaster)
TELLERS FOR THE NOES.—


Hallas, Eldred
O'Grady, James
Dr. Murray and Major Barnes.


Halls, Walter
Parkinson, John Allen (Wigan)

Mr. MOSLEY: I beg to move, at the end of the Clause, to insert the words
Provided that this Section shall cease to apply after the first day of August, nine-
teen hundred and twenty-one, to violins which are over one hundred years old or of a greater value than fifty pounds, and which are imported after the said date.
I am fully conscious that at first sight this Amendment appears to be unreasonable, and to discriminate between expensive and inexpensive musical instruments in an undesirable manner. I think, however, if the Committee will bear with me for a few moments while I briefly expound the case, such as it is, they will agree with me that this proposal can summon a considerable measure of reason to its aid. In brief, the case is that, by the prohibitive tariff instituted in this Bill, a valuable trade affording employment to a considerable amount of skilled labour and benefiting the revenue of this country to a very considerable degree, is being entirely destroyed and driven abroad. The case of the old violin is different from that of the new instrument, for many reasons. To begin with, old violins are not purchased in this country, or at any rate they are only purchased in very negligible numbers. For the last year or two no old violins have been purchased in this country. This trade rests entirely upon the re-export side of the business, and these old violins merely pass through this country but, in their passage, they benefit very considerably the revenue by the profits which are made by our merchants.
These duties have been defended on very varying grounds, and on three grounds that I have heard and remember myself. I venture to argue that on not one of these grounds can a tax on these old instruments be upheld. The first argument advanced in favour of these duties is that they benefit the revenue. I challenge with confidence my right hon. Friend to state that one penny has been derived by the revenue from the tax on old instruments. I am assured by the leading members of this trade, one of the chief of whom is a constituent of my own, that not a single old violin has been imported into this country since this tariff began, or at any rate during the last year or two. Consequently, the revenue has benefited not at all. The second ground on which this tax is justified, on occasion, is that it affords a protection to certain industries in this country. It is impossible to argue that it is necessary to protect the industry which manufactures antique violins. It might be possible that the industry for the manufacture of antique furniture stood in need of protection, but, in point
of fact, no one will contend that an industry for the manufacture of antique violins has ever been constituted in this country or is likely to be constituted in the future. The third ground on which these duties are justified is that they are necessary in order to stabilise the exchange by the prohibition of luxuries entering this country. I quite agree that if these violins were bought extensively in this country that third ground might apply in this case. I can assure the right hon. Gentleman that under the present burden of taxation in this country nobody is buying these expensive instruments, no one is likely to buy them, and no one has, in fact, bought them. In only one country in the world are these instruments being purchased, and that country is America. The fact that these instruments are being bought by America and are passing through this country prior to their purchase is, in fact, stabilising the exchanges of the world in exactly the manner desired by the right hon. Gentleman. These instruments are bought in the Central Empires, mostly in Austria, they pass through this country, and are sold in America. The net result of the transaction is to benefit the exchange of the Central Empires at the expense of the exchange of America.
The Government is constantly ascribing many of the ills under which we labour to-day to the collapsed exchanges of the Central European countries. By these transactions those exchanges are benefiting at the expense of America, which has an appreciated exchange; and incidentally, by their passage through this country and by the profit that is made on the resale of these instruments to America, our merchants in this country benefit considerably, and consequently the general revenue of the country benefits by way of taxation. It is evident that on none of the grounds on which these duties are usually justified is it possible to defend their application to these old instruments. They do not benefit the revenue of the country; they do not protect any industry; they are not necessary to stabilise our exchange—in fact they militate, to such an extent as they affect the matter, against that stability which the right hon. Gentleman desires. I anticipate that the right hon. Gentleman will argue that it is possible for these English merchants to claim on re-export a refund of the amount ex-
pended. That is technicality correct, but there are very grave practical difficulties in the way.
To begin with, it is very difficult to identify these old instruments. The Customs authorities, quite naturally, must be satisfied that the same instruments are re-exported. They must exercise the profoundest caution, and in point of fact the method that they pursue is to affix large seals to these old instruments. These put very great difficulties in the way of our merchants. The work of the trade is to restore these old instruments—in which work a considerable body of skilled labour is employed—to test them, and then to re-export them. The work of restoration and testing is virtually prohibited by the affixing of these seals to the instrument. It is impossible for the repairer to handle the instrument properly, and for the tester to play it properly. Consequently, with these seals affixed to the instrument, it is impossible for our merchants to carry on their business. The net result is that, unless the duties are rescinded, in so far as they apply to these old instruments, the main business in them, at any rate, is about to be transferred bag and baggage to Paris. That is the definite and fixed intention of these merchants, and of the chief importer in particular, namely, Mr. Hill, of Bond Street, who is a constituent of my own. The effect will be to deprive the British Revenue of the profit derived from the passage of these old instruments through the country. I venture to urge upon the right hon. Gentleman that no surrender of principle in involved in making this concession to a business which in the past has been eminently profitable to this country, nor is any surrender of revenue from the duties involved; and the right hon. Gentleman, without involving any evil consequences of any conceivable kind, might well meet these merchants and give them this concession. America, the greatest Protectionist country in the world, has removed the tariff against the entry of these old instruments, and, if she can open her arms to receive these treasures in perpetuity, surely we can open our borders merely to permit their passage, and, incidentally, the accretion of considerable revenue to our own resources.

Sir R. HORNE: I am sure that the constituent to whom the hon. Member
has referred will feel that his case has received full justice in the speech to which we have just listened. I hope that the hon. Member will forgive me if I answer it in a single sentence. The answer is the same answer which was given by the author of these duties, Mr. McKenna. He said that the duties were luxury duties, and that, if there were anything that could be described as a luxury, it was a particularly valuable violin. On that ground he refused to consider their withdrawal.

Mr. KILEY: The Chancellor of the Exchequer has omitted to deal with the point raised by my hon. Friend (Mr. Mosley) with regard to a drawback or rebate when these goods are sent out of the country. That was really the principal point upon which my hon. Friend dwelt. I rise, not so much to support the Amendment, as to ask the Chancellor of the Exchequer whether he could not reconsider at some later stage the effect of these duties on violins as a whole. Take the case of a musician who earns his living by playing in an orchestra. He is taxed to the extent of 33⅓ per cent. on every violin or string that he uses.

The CHAIRMAN: This Amendment only applies to violins of a particular age or of a particular value.

Mr. KILEY: I was dealing with the strings. Whether they are on toy violins, on which the Chancellor of the Exchequer takes his toll of 33⅓ per cent.—

The CHAIRMAN: We cannot deal with that on this Amendment, which is very restricted in its scope.

Mr. KILEY: I submit, with all respect, that there is a duty on violin strings, and whether those strings are on an instrument worth £50 or £150, or whether they are on a toy violin which costs eighteen-pence, there is still a duty to be paid on the strings. However, I will not pursue that.

The CHAIRMAN: The hon. Member could have dealt with that in a separate proviso, but we cannot now discuss it.

Sir MARTIN CONWAY: I had expected that the Chancellor of the Exchequer would have seen his way to accept this Amendment. I should not
have risen had it not been for the reason that he gave for not doing so. Against that I feel bound to protest. The right hon. Gentleman spoke of a violin as a luxury, but he is entirely and absolutely misinformed if he thinks that that is the case. A cheap violin is certainly not a luxury, and a Stradivarius or a violin by some other of the old and best makers is not a luxury. The right hon. Gentleman might just as well speak of a picture by Raphael or Velasquez, or any work of art, as a luxury. Why does civilisation exist except to produce works of art? It is the only ultimate value that the whole of civilisation has. All that we talk about and do in this House in the way of legislation for industries of different kinds, labour, profits, and all the rest—all of it ultimately eventuates in works of art. That is the only thing for which civilisation exists. An old violin is one of the finest works of art that can be imagined. The Government in its entirety should go to the port to receive it and bring it to London. There is nothing more magnificent in the world than these splendid old violins, and yet you try to keep them out of the country. The thing is an absurdity. You ought to welcome them; you ought to give a bounty rather than levy a duty upon them. I think that the attitude of the Chancellor of the Exchequer, if he will forgive me for saying so, is one that he must have taken up without due reflection. I trust that he may see his way, if not now, later on, to reverse the decision which in a hasty moment he has been led to take, and to admit these treasures into the country free of duty—not merely in the case of old violins, but in every case in which an object of supreme and extraordinary beauty and value is a national asset which we ought to be delighted to take. When you talk about them as a luxury, it must be remembered that one of these beautiful old violins, in the hands of a real performer, is a potentiality of immense value of the highest kind to vast numbers of people. It will develop their sense of beauty, will render them content amidst the miseries through which we have to pass in these evil days, and will in every way add to the health and happiness of the people. Therefore, I trust that the right hon. Gentleman will see his way to reverse his decision upon this point.

Mr. INSKIP: There is one reason which the hon. Member (Mr. Mosley) did
not give in support of the Amendment. That is that it would have been very profitable to certain persons in this country and would have brought large sums of money into the country. There is in some countries an industry which produces violins which appear to be 100 years old or more. The instruments produced by these expert people are excellent counterfeit instruments. When they are brought to this country, a Customs official in gold lace will examine each of them, and, with the assistance of the New Bond Street emporium, he would say that it is 100 years old. It will then be admitted free of duty, and will have a certificate given by the gentleman in gold lace at the Customs wharf; and it will then be sold to America guaranteed by the British Customs as 100 years old. Having been brought from the gentleman who made it in Italy, it will produce a very large sum in profit, upon which a large Income Tax will be payable by the New Bond Street emporium. That is an excellent argument, of which I make the hon. Member a present, in favour of the. Amendment.

Mr. T. THOMSON: Notwithstanding the ridicule which the hon. and learned Member (Mr. Inskip) has attempted to throw on this Amendment, I submit that, whatever our definition of a luxury may be, the reply of the Chancellor of the Exchequer did not meet the very strong logical case in support of the Amendment. The point, surely, was that these instruments were coming in, not for sale or use here, but for the purpose of a process of manufacture. They were bought in Austria as raw material, as it were, for the manufacturer here. That is the fundamental fallacy of so much of this protective legislation. The manufactured article of one trade is the raw material of another. These violins, to the manufacturer who employed, a large number of people, were the raw material upon which his work was done. A large amount of labour was spent upon them, providing a considerable amount of employment. Surely, at a time like this, when only yesterday we had the claims of unemployment so much before us—[Interruption]. Notwithstanding the interruptions, I submit that this instance, although it may be a small one, illustrates the viciousness of the whole of this legislation which is restricting the export and import trade of this country. Anything that will
remove the difficulties which this legislation imposes ought to receive the support of the Committee.

Amendment negatived.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 181; Noes, 72.

Division No. 171.]
AYES.
[7.34 p.m.


Addison, Rt. Hon. Dr. Christopher
Gardiner, James
Ormsby-Gore, Hon. William


Agg-Gardner, Sir James Tynte
Gee, Captain Robert
Palmer, Brigadier-General G. L.


Allen, Lieut.-Colonel William James
Gibbs, Colonel George Abraham
Parker, James


Ashley, Colonel Wilfrid W.
Gilbert, James Daniel
Pearce, Sir William


Bagley, Captain E. Ashton
Gilmour, Lieut.-Colonel Sir John
Pease, Rt. Hon. Herbert Pike


Baird, Sir John Lawrence
Goulding, Rt. Hon. Sir Edward A.
Peel, Col. Hn. S. (Uxbridge, Mddx.)


Balfour, George (Hampstead)
Gray, Major Ernest (Accrington)
Percy, Lord Eustace (Hastings)


Balfour, Sir R. (Glasgow, Partick)
Green, Albert (Derby)
Perkins, Walter Frank


Barlow, Sir Montague
Greenwood, William (Stockport)
Pollock, Sir Ernest Murray


Barnston, Major Harry
Harris, Sir Henry Percy
Pratt, John William


Barrand, A. R.
Henry, Denis S. (Londonderry, S.)
Prescott, Major W. H.


Bell, Lieut.-Col. W. C. H. (Devizes)
Herbert, Col. Hon. A. (Yeovil)
Pretyman, Rt. Hon. Ernest G.


Bellairs, Commander Carlyon W.
Herbert Dennis (Hertford, Watford)
Purchase, H. G.


Betterton, Henry B.
Holbrook, Sir Arthur Richard
Rawlinson, John Frederick Peel


Bigland, Alfred
Hood, Joseph
Reid, D. D.


Birchall, Major J. Dearman
Hope, Sir H.(Stirling & Cl'ckm'nn,W.)
Richardson, Alexander (Gravesend)


Bird, Sir A. (Wolverhampton, West)
Hopkins, John W. W.
Rodger, A. K.


Bird, Sir William B. M. (Chichester)
Horne, Sir R. S. (Glasgow, Hillhead)
Roundell, Colonel R. F.


Blair, Sir Reginald
Hotchkin, Captain Stafford Vere
Royds, Lieut.-Colonel Edmund


Borwick, Major G. O.
Hunter-Weston, Lieut.-Gen. Sir A. G.
Samuel, Samuel (W'dsworth, Putney)


Boscawen, Rt. Hon. Sir A. Griffith-
Hurd, Percy A.
Sanders, Colonel Sir Robert Arthur


Boyd-Carpenter, Major A.
Hurst, Lieut.-Colonel Gerald B.
Sassoon, Sir Philip Albert Gustave D.


Breese, Major Charles E.
Inskip, Thomas Walker H.
Scott, A. M. (Glasgow, Bridgeton)


Bridgeman, Rt. Hon. William Clive
Jackson, Lieut.-Colonel Hon. F. S.
Scott, Leslie (Liverpool, Exchange)


Brittain, Sir Harry
Jephcott, A. R.
Seager, Sir William


Buckley, Lieut.-Colonel A.
Jones, Sir Edgar R. (Merthyr Tydvil)
Shaw, Capt. William T. (Forfar)


Bull, Rt. Hon. Sir William James
Jones, J. T. (Carmarthen, Llanelly)
Simm, M. T.


Burn, Col. C. R. (Devon, Torquay)
Kellaway, Rt. Hon. Fredk. George
Sprot, Colonel Sir Alexander


Butcher, Sir John George
Kelley, Major Fred (Rotherham)
Stanier, Captain Sir Beville


Campbell, J. D. G.
Kidd, James
Stanley, Major Hon. G. (Preston)


Chamberlain, Rt. Hn. J. A. (Birm., W.)
King, Captain Henry Douglas
Stanton, Charles Butt


Chamberlain, N. (Birm., Ladywood)
Lane-Fox, G. R.
Steel, Major S. Strang


Churchman, Sir Arthur
Larmor, Sir Joseph
Stephenson, Lieut.-Colonel H. K.


Clough, Robert
Law, Alfred J. (Rochdale)
Stewart, Gershom


Coates, Major Sir Edward F.
Lewis, Rt. Hon. J. H. (Univ., Wales)
Sturrock, J. Leng


Coats, Sir Stuart
Locker-Lampson, Com. O. (H'tingd'n)
Sugden, W. H.


Cobb, Sir Cyril
Lorden, John William
Taylor, J.


Coote, Colin Reith (Isle of Ely)
Loseby, Captain C. E.
Thomson, F. C. (Aberdeen, South)


Cope, Major William
Lowther, Maj.-Gen. Sir C. (Penrith)
Thomson, Sir W. Mitchell- (Maryhill)


Cowan, Sir H. (Aberdeen and Kinc.)
Lyle, C. E. Leonard
Thorpe, Captain John Henry


Craig, Captain C. C. (Antrim, South)
M'Donald, Dr. Bouverie F. P
Tryon, Major George Clement


Craik, Rt. Hon. Sir Henry
Mackinder, Sir H. J. (Camlachie)
Turton, Edmund Russborough


Davies, Thomas (Cirencester)
McLaren, Robert (Lanark. Northern)
Walton, J. (York, W. R., Don Valley)


Davison, Sir W. H. (Kensington, S.)
M'Lean, Lieut.-Col. Charles W. W.
Ward, Col. J. (Stoke-upon-Trent)


Denniss, Edmund R. B. (Oldham)
McMicking, Major Gilbert
Warner, Sir T. Courtenay T.


Dewhurst, Lieut.-Commander Harry
McNeill, Ronald (Kent, Canterbury)
Watson, Captain John Bertrand


Dockrell, Sir Maurice
Macpherson, Rt. Hon. James I.
White, Col. G. D. (Southport)


Doyle, N. Grattan
Maitland, Sir Arthur D. Steel-
Willey, Lieut.-Colonel F. V.


Du Pre, Colonel William Baring
Malone, Major P. B. (Tottenham, S.)
Williams, C. (Tavistock)


Edwards, Major J. (Aberavon)
Marriott, John Arthur Ransome
Wise, Frederick


Elliot, Capt. Walter E. (Lanark)
Martin, A. E.
Wood, Hon. Edward F. L. (Ripon)


Eyres-Monsell, Com. Bolton M.
Meysey-Thompson, Lieut.-Col. E. C.
Wood, Sir H. K. (Woolwich, West)


Falle, Major Sir Bertram Godfray
Molson, Major John Elsdale
Worsfold, T. Cato


Farquharson, Major A. C.
Montagu, Rt. Hon. E. S.
Yate, Colonel Sir Charles Edward


Fell, Sir Arthur
Moreing, Captain Algernon H.
Yeo, Sir Alfred William


FitzRoy, Captain Hon. Edward A.
Morrison, Hugh
Young, E. H. (Norwich)


Flannery, Sir James Fortescue
Morrison-Bell, Major A. C.
Young, Sir Frederick W. (Swindon)


Ford, Patrick Johnston
Murray, John (Leeds, West)
Younger, Sir George


Forrest, Walter
Murray, William (Dumfries)



Foxcroft, Captain Charles Talbot
Neal, Arthur
TELLERS FOR THE AYES —


Fraser, Major Sir Keith
Newman, Sir R. H. S. D. L. (Exeter)
Colonel Leslie Wilson and Mr.


Gange, E. Stanley
Nicholson, Reginald (Doncaster)
Dudley Ward.


NOES.


Acland, Rt. Hon. Francis D.
Carter, W. (Nottingham, Mansfield)
Graham, R. (Nelson and Colne)


Adamson, Rt. Hon. William
Clynes, Rt. Hon. John R.
Graham, W. (Edinburgh, Central)


Asquith, Rt. Hon. Herbert Henry
Cowan, D. M. (Scottish Universities)
Griffiths, T. (Monmouth, Pontypool)


Barker, G. (Monmouth, Abertillery)
Davies, A. (Lancaster, Clitheroe)
Grundy, T. W.


Barnes, Major H. (Newcastle, E.)
Edwards, C. (Monmouth, Bedwellty)
Guest, J. (York, W.R., Hemsworth)


Benn, Captain Wedgwood (Leith)
Edwards, G. (Norfolk, South)
Hall, F. (York, W.R., Normanton)


Bowerman, Rt. Hon. Charles W.
Finney, Samuel
Hallas, Eldred


Brimfield, William
Galbraith, Samuel
Hartshorn, Vernon


Brown, James (Ayr and Bute)
Gillis, William
Hayday, Arthur


Cairns, John
Glanville, Harold James
Hayward, Evan


Henderson, Rt. Hon. A. (Widnes)
Mills, John Edmund
Spoor, B. G.


Hinds, John
Morgan, Major D. Watts
Swan, J. E.


Hirst, G. H.
Murray, Or. D. (Inverness and Ross)
Thomson, T. (Middlesbrough, West)


Hogge, James Myles
Myers, Thomas
Thorne, W. (West Ham, Plaistow)


Holmes, J. Stanley
Newbould, Alfred Ernest
Walsh, Stephen (Lancaster, Ince)


John, William (Rhondda, West)
O'Grady, James
Waterson, A. E.


Johnstone, Joseph
Parkinson, John Allen (Wigan)
White, Charles F. (Derby, Western)


Jones, J. J. (West Ham, Silvertown)
Rees, Capt. J. Tudor (Barnstaple)
Wignall, James


Kennedy, Thomas
Richardson, R. (Houghton-le-Spring)
Williams, Aneurin (Durham, Consett)


Kenyon, Barnet
Roberts, Frederick O. (W. Bromwich)
Wilson, Rt. Hon. J. W. (Stourbrdge)


Lawson, John James
Robertson, John
Wilson, W. Tyson (Westhoughton)


Lunn, William
Sexton, James
Young, Robert (Lancaster, Newton)


Maclean, Neil (Glasgow, Govan)
Short, Alfred (Wednesbury)



MacVeagh, Jeremiah
Sitch, Charles H.
TELLERS FOR THE NOES.—


Mallalieu, Frederick William
Spencer, George A.
Dr. Murray and Major Barnes.


Question, "That the Clause stand part of the Bill," put, and agreed to.

CLAUSES 2 (Continuation of increased medicine duties), 3 (Duty on sparkling wine), and 4 (Additional duty on cigars repealed), ordered to stand part of the Bill.

CLAUSE 5.—(Amendment with respect to exemption from railway passenger duty.)

(1) The Cheap Trains Act, 1883, shall have effect as though—

(a) for paragraphs (1) and (2) of Section two (which provide for the abolition of passenger duty in the case of cheap trains and for its reduction on urban traffic), there were substituted the following paragraphs: —

"(1) Fares not exceeding minimum fares shall be exempt from duty:
"(2) The duty on fares for conveyance between railway stations within one urban district certified so to be in manner provided by this Section shall be payable at the rate of two per cent. instead of five per cent.:"
(b) in paragraph (a) of Sub-section (1) of Section three (which requires provision to be made for proper third-class accommodation), the words "fares not exceeding the fares normally charged for passengers conveyed in third-class carriages" were substituted for the words "fares not exceeding the rate of one penny a mile," and in Section five the words "a fare not exceeding the minimum fare" were substituted for the words "a fare not exceeding the rate of one penny a mile":
(c) the following provision were inserted in Section eight after the definition of "police authority"—

"The expression 'minimum fare' means the lowest fare normally charged to an adult or a child, as the case may be, for a single, a return, or a periodical ticket, as the case may be, for any journey, and the expression 'normally charged' means charged otherwise than to a special class of passengers or on a special occasion:

"Provided that where a ticket for any journey, whether a single, return or periodical ticket, entitles a person to be conveyed in a class
of carriage superior to the class of carriage in which a person holding a ticket for that journey for which the minimum fare is payable is entitled to be conveyed, the fare for the first-mentioned ticket shall not be deemed to be a minimum fare."

(2) This Section, in its application to any railway undertaking of which possession was not retained or taken by the Minister of Transport under the Ministry of Transport Act, 1919, shall be deemed to have had effect as from the first day of April, nineteen hundred and twenty.

(3) Nothing in this Section shall operate to charge with railway passenger duty any fares which were not at the commencement of this Act chargeable with such duty.

Mr. MARRIOTT: I beg to move, in Sub-section (1, c), to leave out the words
Provided that where a ticket for any journey, whether a single, return or periodical ticket, entitles a person to be conveyed in a class of carriage superior to the class of carriage in which a person holding a ticket for that journey for which the minimum fare is payable is entitled to be conveyed, the fare for the first-mentioned ticket shall not be deemed to be a minimum fare.
This Amendment will commend itself to every quarter of the House, and I hope to the Government, because the object, as I understand it, is merely to carry out the object of the Clause, which is to adjust the exemptions of cheap fares as contained in the Cheap Trains Act, 1883, to the recent increase in passenger fares. Under the second Section of the Cheap Trains Act fares not exceeding a rate of one penny per mile were exempted from the duty of 5 per cent. which was imposed by the Railway Passenger Duty Act, 1842. The fares exempted were, speaking generally, the ordinary third-class fares, but the exemption was determined solely by the amount of the fares without any reference to the class in which the passenger travelled. The Committee is only too painfully aware that fares have recently been raised by 75 per cent. The result is that the exemption of 1d.
a mile fares may become entirely illusory. So in order to carry out the policy of the Act of 1883, the principle of which is approved by probably every Member of the House, it is provided by this Clause that fares not exceeding minimum fares shall be exempt from the duty. Minimum fares are defined by paragraph (c). For some reason which I am unable to apprehend the definition is made subject to the proviso which I am seeking to omit, that where the ticket entitles the holder to travel in a superior class, the fare paid in respect of him is not to be deemed the minimum fare. That would seem to operate, as I read the Subsection, unfairly in one or two cases. In the first place, the railway companies are in the habit of issuing what are called privilege tickets to their employés, when they want to go away for a holiday, or for other purposes, at one-quarter rate. The fare for a ticket of this character, which entitles the holder to travel in a superior class, may be actually below the minimum rate as defined in this Section. These tickets will, as I read the Subsection, now be subject to duty though they were not subject to duty under the Act of 1882. That is one case in which the Section will operate in a way which could not have been designed by those who drafted it. There is another case. One company under the old Act, I think it was the Great Eastern Railway Company, found it profitable to reduce their ordinary second-class fares to a rate not exceeding one penny per mile in order to obtain advantage of the exemption. These fares will also be subject to duty owing to the proviso which I am proposing to omit.
Unless my Amendment be accepted the inducement to afford convenience—it is more than convenience, it is a great benefit—to the public, will be withdrawn. I find it very difficult to understand why an accepted exemption, a well-established exemption, which is embodied in an Act of Parliament, and has been approved by the policy of this House, should be cut down in the way that it is proposed to be cut down, especially as I am advised that there is very little, if any, money involved in it. I do not think the Chancellor of the Exchequer will be able to say that he expects to obtain much revenue from this. Sub-section (3) says:
Nothing in this Section shall operate to charge with railway passenger duty any fares which were not at the commencement of this Act chargeable with such duty.
It is very likely that I shall be told that that provides all the protection which I or anybody else can think necessary. This last Sub-section, however, will have a rather remarkable result, which was probably unforeseen by the Treasury. The result will be to leave what are called privilege tickets for a superior class, where the quarter fare come to less than the old one penny rate, still exempt, but such fares will be liable to duty if the fare is anything between the one penny rate and the minimum fare as defined in this Section. Therefore, the only effect of the proviso which I am proposing to omit would appear to be to subject the railway companies to a vexatious obligation in respect of collection and returns without any corresponding advantage to the Revenue. If that be so, I submit that the proviso ought to be omitted.

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal): My right hon. Friend the Chancellor of the Exchequer has asked me to speak on this Amendment, as it is a railway matter. I differ entirely from the conclusions at which my hon. Friend has arrived at the end of his speech. May I invite the Committee to consider exactly what it is that we are doing? The Cheap Trains Act relieved railway companies of the Railway Passenger Duty on certain conditions. Those conditions were two. In the first place, they were to run a certain number of trains at fares of not more than one penny per mile, which became known in common parlance as Parliamentary trains. Secondly, they were to provide a reasonable number of trains for workmen. The one penny per mile was, speaking generally, the third-class fare. Classes superior to that were left subject to certain duties. When the War altered prices to such an extent that the fares had to be put up, Parliament considered the matter, and in 1917 passed an Act, the substantial effect of which was to suspend the operation of the collection of the Duty during the period of the control of railways. The reason for that is plain. When the State was both paying and receiving, there was no object in keeping voluminous and separate accounts and the companies going through the form of paying over the duty. Clause 5 was introduced by the Government expressly
for the benefit of the railway companies. The one penny per mile has gone. It is now 1¾d., speaking generally. We refer to it in this Clause as the minimum fare, and the object of the Clause is to give the companies the same exemption from duty in respect of the minimum fare as they had in respect of the penny fare per mile. The proviso which my hon. Friend moves to delete is necessary in order to secure that the exemption is not extended further than it was before. If hon. Members will look at the wording of the proviso they will see that
Provided that where a ticket for any journey, whether a single, return or periodical ticket, entitles a person to be conveyed in a class of carriage superior to the class of carriage in which a person holding a ticket for that journey for which the minimum fare is payable is entitled to be conveyed, the fare for the first-mentioned ticket shall not be deemed to be a minimum fare.
In other words, if it entitle the traveller to go first or second class and not third class, then the fare for the first-mentioned ticket shall not be deemed to be the minimum fare. This proviso does not alter the substance of the law from what it was under the Cheap Trains Act. We have had various classes of cheap tickets. There have been week-end tickets, and we may have them again. We have had cheap tickets in the form of season tickets. Those are the periodical tickets mentioned in the Clause. Then there are special tickets for special journeys at reduced fares. Where these special tickets or week-end tickets or other classes of tickets would work out at less than 1d. per mile under the old scale, they were chargeable with the duty because they were first or second class tickets. This proviso is intended to maintain the position exactly unchanged, because these tickets will still be first or second class tickets, even though under a special circumstance the fare is less than the minimum fare. The proviso does not alter the old position at all. It maintains intact mutatis mutandis the old position. If this Amendment is carried, those classes of ticket would for the first time escape duty. The hon. Member says that in the case of privilege tickets issued by railway companies they ought not to have this duty attached to them. My answer is that, in the first place, certain privilege tickets always have paid duty, while certain privilege tickets have not paid duty. My hon. Friend also cited the case of the
Great Eastern Railway Company, and said that some special concession they made to their passengers brought them below the 1d. per mile, and now possibly may bring them below the minimum. I do not think so. On these two exceptional cases my hon. Friend moves an Amendment which is so wide in its terms that it would relieve from taxation all the special classes of tickets I have mentioned. In order fully to protect the case which my hon. Friend has in view, these points have been specifically called to the attention of the Treasury, and they have inserted Sub-section (3), which absolutely and fully covers my hon. Friend's case.
Nothing in this Section shall operate to charge with railway passenger duty any fares which were not at the commencement of this Act chargeable with this duty.
That is to say, a. privilege ticket which before the Act escaped duty will still escape duty. The Great Eastern cheap ticket which prior to the Act escaped duty will still escape duty. I respectfully suggest to my hon. Friend that we have met his point in Sub-section (3).

Amendment negatived.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young): I beg to move, in Sub-section (2), to leave out the words "or taken."
8.0 P.M.
This is a little more than a drafting Amendment, or only so much more that makes it desirable to introduce in Committee rather than on Report. The scheme of the Clause is, as it has been described by my hon. Friend, to exempt from duty fares not exceeding minimum fares. It is made retro-active in Subsection (2) in order to exempt those railway companies which were not retained under control from the time at which fares were raised. In that provision as to making the effect of the relief retro-active, two words have been inserted, 'or taken," which would have the result of refusing this relief to certain companies which have had to pay the duty and, therefore, are entitled to the relief. It is in order to make sure that the extension of the relief shall be to all companies which are entitled to it that we propose to omit these words.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clauses 6 (Allowance of Customs draw-back on removal of goods to Isle of Man), 7 (Drawback on deposit in warehouse of goods to be used as ships' stores) 8 (Amendment of law as to exportation of shipment as stores of playing cards), 9 (Power to make Regulations with respect to spirits manufactured otherwise than by distillation), 10 (Provision with respect to power methylated spirit), 11 (Amendment of s. 8 of 42 and 43 Vict. c. 21), 12 (Use of false scales, weights, etc., in connection with Customs and Excise), 13 (Amendment of s. 11 of 5 & 6 Geo. 5, c. 7), 14 (Amendment of s. 13 of 39 & 40 Vict., c. 36), 15 (Amendment of law as to Excise entries by corporations), and 16 (Duties of Commissioners of Customs and Excise in relation to analysis of articles under Food and Drugs Acts, 1875 to 1907, transferred to Government Chemist), ordered to stand part of the Bill.

Part II.

INCOME TAX.

CLAUSE 17.—(Income Tax and Super-tax for 1921–22.)

(1) Income Tax for the year 1921–22 shall be charged at the rate of six shillings, and the rates of Super-tax for that year shall, for the purposes of Section four of the Income Tax Act, 1918, as amended by the Finance Act, 1920, be the same as those for the year 1920–21.

(2) All such enactments relating to Income Tax and Super-tax respectively as were in force with respect to the duties of Income Tax and Super-tax granted for the year 1920–21, shall have full force and effect with respect to the duties of Income Tax and Super-tax respectively granted by this Act.

(3) The annual value of any property which has been adopted for the purpose either of Income Tax under Schedules A and B, or of Inhabited House Duty, for the year 1920–21, shall be taken as the annual value of that property for the same purpose for the year 1921–22:

Provided that this Sub-section—

(a) so far as respects the duty on inhabited houses in Scotland, shall be construed as referring to a year of assessment ending on the twenty-fourth day of May instead of to a year of assessment ending on the fifth day of April; and
(b) shall not apply to lands, tenements, and hereditaments in the Administrative County of London with respect to which the valuation list under the Valuation (Metropolis) Act, 1869, is, by that Act, made conclusive for the purposes of Income Tax and Inhabited House Duty.

Mr. PRETYMAN: I beg to move, in Sub-section (1), to leave out the word "six" and to insert instead thereof the word "five."
I do not suppose that the most sanguine Member of this House expects this Amendment to be carried, though, if it could be carried, perhaps it would do more than any other to encourage the restarting of trade and industry in this country. I have put it on the Paper in order to get an opportunity of raising a discussion on a point of view especially concerned with the Income Tax which has not been discussed up to the present. So far as the Debate has gone, it has been on the old lines, which were quite proper and important under previous conditions, as to whether somebody was paying too much or too little as between direct and indirect taxation, and as between different classes of taxpayers, and the atmosphere is that there is a certain burden of taxation which the nation as a. whole can bear, and the principal duty of this House is to try to distribute it fairly. That has been the position for so many years before the War that it is very difficult to get out of that attitude. I suggest that we are now in a condition which raises a much more vital issue, the issue as to how the nation as a whole is going to bear the burden of these taxes that are placed upon it. It is not a question so much of who is to pay what, as of how is this burden of Income Tax to be borne at all.
I raised this question in a preliminary way in some remarks which were made in the course of the Budget Debate on the Financial Resolutions upon which the Finance Bill is founded. I then quoted figures which I thought made a strong case to show that at the present rate of Income Tax it is a general complaint that those who have to pay a large portion of the Income Tax have to pay it out of capital and cannot pay it out of income. If that process continues there is no question that the hardship to individuals would be endangering the most vital sources of income on which our national revenue is based. The Secretary to the Treasury answered the point which I then made. I may quote to the Committee what I said, and what was the answer. I said:
It is very unfair that the House should be led to suppose that the £413,000,000 which has to be levied out of Income Tax in this coming year can really be paid out
of income. That certainly leads to grave misunderstanding. The country believes that we can afford these sums when we really cannot afford them, and they are actually being paid out of capital."—[OFFICIAL REPORT, 26th April, 1921; col. 221, Vol. 141.]
My hon. Friend in reply to that said:
There was an observation made by the right hon. Member for Chelmsford which ought not to go without immediate challenge and reply. Dwelling, and rightly dwelling, upon the dangers of running taxation down to the narrow point at which it becomes taxation upon capital, thereby devouring the essential margin of safety, and so on, he said in a speech which moved the House that the burden of Income Tax of £410,000,000 this year is so great that it cannot be paid out of income and must be paid out of capital. It must not be allowed to go without immediate contradiction that this country is unable to pay an Income Tax of £410,000,000 in the year without drawing on its capital. The actual amount of income under assessment in the year in question is £2,350,000,000. The machinery of no tax is perfect. The machinery of income is not perfect, but it is not so grossly imperfect as to exaggerate the assessable income of this country from £410,000,000 to £2,350,000,000." —[OFFICIAL "REPORT, 26th April, 1921; cols. 264–5, Vol. 141.]
It is important to follow that issue up a little further, because it is of great importance to the country from the financial point of view. I admit there is a superficial difference between the proposition which I made and the answer of the Secretary to the Treasury. I pointed out that, in a very large proportion of the area over which Income Tax is paid, it cannot be paid out of income. The answer given me is a slightly different proposition, namely, that the total amount of Income Tax can easily be met out of the total amount of income of the country. I suggest that there is a point at which those two propositions meet and cover exactly the same ground. As to this I will give a quotation from Adam Smith's "Wealth of Nations." I suppose that it is rather out of date now, and that a quotation from Karl Marx would be more up to date.

Mr. J. JONES: Hear, hear!

Mr. PRETYMAN: Perhaps that accounts somewhat for the present financial condition. A great many of the people responsible for a good deal of what is going on in the country to-day have forsaken the principles enunciated by Smith and taken up those of Marx

Mr. JONES: Quote Marx on taxation.

Mr. PRETYMAN: I prefer Adam Smith; my hon. Friend can answer with
Karl Marx, who is his prophet. Adam Smith says:
As the capital of an individual can be increased only by what he saves from his annual revenue or gain, so the capital of a society, which is the same as that of the individuals who compose it, can be increased only in the same manner.
As to the point of view chosen by my hon. Friend in reference to the whole basis of revenue raised from Income Tax, I will quote the figures for 1918–19, which are the last available. The only difference between those and the figures for the last completed year are in amount, and to a certain extent in proportion, but they would rather strengthen my case. The total income assessed for Income Tax in 1918–19 was £1,970,000,000. Of that £1,745,000,000 was the income of persons or individuals and £225,000,000 was the undistributed profits of societies and companies. In examining the question as to how far the £410,000,000 can be met out of the £2,350,000,000, exactly the same question has to be examined as in the case of the year 1918–19 when we are considering how the Income Tax which was about £338,000,000, if I remember aright, is to be distributed over the income of that year, which was not £2,300,000, but £1,970,000,000. The problem is exactly the same, though the figures are slightly different. It is important to see how much of that income of £1,970,000,000 is really available for taxation.
I have taken a figure on which every hon. Member can form his own opinion as to whether it is the sort of figure which he would have taken himself in studying it from the same point of view, and I have roughly assumed, where incomes are under £1,000 in present circumstances, and with the present cost of living, that there is very little available to bear heavy taxation, and, therefore, the part of the income of £1,970,000,000, which is the income of people whose income is below £1,000, is not susceptible of any heavy drain for the purpose of Income Tax taxation. I start, I think, with general agreement on that. Therefore it is interesting to note, if that point is agreed, that out of the £1,970,000,000 of income for the year 1918–19, the total tax raised upon incomes of less than £1,000 was £51,000,000, or slightly less than 1s. in the £. The total amount of incomes belonging to people who have over £1,000
a year was £668,000,000, and they paid in direct taxation £222,000,000, or an average on all incomes of above £1,000 a year of 6s. 8d. in the £, as compared with an average of Is. in the £ paid by people with incomes below £1,000. Therefore I do not think I shall be taking an unfair point if I reply to my hon. Friend the Secretary to the Treasury that it is only upon the £668,000,000 that this question which he discusses arises.

Mr. A. LAW: Is the right hon. Gentleman taking Super-tax into consideration?

Mr. PRETYMAN: Yes, Income Tax, including Super-tax. That is part of the reason. Those who have incomes below £1,000 pay no Super-tax. A great many of those above £1,000 do pay Super-tax. The Income Tax and Super-tax together give the figure I have stated of 6s. 8d. in the pound, out of £668,000,000. Let us consider the £225,000,000, which is the undistributed profits of investments. It is fair to assume that a very considerable proportion of that is the property of, and is invested by, those who have incomes within £1,000 a year. The tax on that is £65,000,000. But that £65,000,000 has not gone into the pockets of those who own the shares—all that has gone into their pockets is the £668,000,000—although the burden of this tax falls upon that, because it reduces the earning powers of the companies in which the earnings are placed. Therefore you add a considerable proportion of the £668,000,000 to the £225,000,000 already paid. That would bring the tax to 8s. 8d. in the pound on the average, and if you call it 8s., you would not be very far wrong. But since then there has been a still further change in the graduation of the tax. Super-tax has been increased, in many cases by Is., and the graduation has been steepened. Therefore that figure of 8s. is an understatement of the present position. Probably the figure of 9s. would not be very far out, as the present average burden on the incomes of everybody who has over £1,000 a year.
What is that 8s. in the pound levied upon? It is levied upon statutory income. It is rather interesting to note what is the claim by the Inland Revenue as to the basis on which Income Tax is levied. I had the honour of serving on the Royal Commission on Income Tax. I remember the evidence given on behalf of
the Board of Inland Revenue. Mr. Hopkins, who represented the Board, said:
Income Tax applies to all annual income or profit. Broadly speaking, it may be said that by profits are meant net profits, the surplus of income remaining after deducting ail necessary expenses of making it; but this statement is subject to certain qualifications, as will appear hereafter.
I think it must be subject to very considerable qualifications. That definition ought to be borne in mind. Income Tax is levied upon net income, that is, on whatever income is left after deduction of all expenses necessary to earning it. What is statutory income? Is it the same as real income? It is nothing of the kind. Take one rather important item. A large item in the assessment of incomes is housing. Several millions are assessed upon houses in which people live. Every hon. Member will know that his house, whether large or small, is not a source of income to him, but a source of expense. He is, however, assessed for it and he has to pay tax upon it. When you come to what he really has to pay the tax out of, you have to add to the burden on that money the tax which is payable on his house, and that money has also to pay its own tax. Take a garden. I do not know whether hon. Members realise how their gardens are taxed. Whereas a house pays a tax only once, a man's garden is taxed twice. He has to pay Income Tax, and if he is a Super-tax payer he pays Super-tax, to the full amount under Schedule A; and he pays a second time under Schedule B. His garden is a source of expense, and not of income.
When you get into the region of the larger taxpayers—I am not putting it as a case of hardship, but solely in regard to revenue—suppose a man has a park attached to the home farm and he uses it for the grazing of stock. First of all it has to pay Income Tax under Schedule A and Super-tax on the whole value of the park; then Income Tax and Super-tax under Schedule B on the whole value, plus the value of the tithe upon it, on which the owner is taxed; and, in addition to that, if he uses the park as part of the home farm, he might be taxed a third time under Schedule D, because part of the profit of the farm will be made by the use of the park. All these cumulative taxes, levied twice over upon the same unit of taxation, have to be found out
of the residue of real money out of which the real tax has to be paid. Instances can be multiplied, and it is clear that statutory income and real income are very different things. This £338,000,000 in 1918–19, or the £410,000,000 in 1920, has not to be compared with the whole taxable revenue of the country of £1,970,000,000, or £2,300,000,000, but to be compared with the much less sum on which the tax really presses, because the people with under £1,000 a year income are taxed an average of only one shilling in the pound, and are not being ground down. It is the other people on whom you have to "come and go." Therefore, when you compare this £410,000,000, it is not an absurdity to say it cannot be paid out of income, for instead of a lump sum of £1,900,000,000 it is £668,000,000 or £700,000,000, and that £700,000,000 is not real income which has to bear the taxes, but the figure is £338,000,000, and that is statutory income, and the real income is something very much less. So that you are getting very near a point when you are absorbing the whole of the available income of the country. That is the general case. I will deal now with individual cases.
These individual cases are not put forward as cases of hardship, but as having reference to the question of how the nation is going to get revenue in the future. I do not attach any special value to individual cases unless they are representative of the whole, but it is legitimate to give these cases, not as being specially hard, but as those which have come to my hand, and which indicate the general position. I gave one case which, I think, made some impression upon a few hon. Members present at the former Debate. It is the case of a £4 labourer's cottage in my own district. The figures in connection with it are available for the Chancellor if he wishes for them. I may mention that £4 a year is the normal rent for one of these cottages in the east of England. Out of the £4 paid by the agricultural labourer for the cottage, £l 14s. 2d. is paid in rates by the owner on an assessment of £4 5s. The real nominal rate is £2 8s. 9d., but 30 per cent. is allowed to the owner under the compounding system. He cannot deduct that rate from his Income Tax, and therefore to the £1 14s. 2d. in rates must be added 18s. of Income Tax, representing 6s. in the £ on an Income Tax assess-
ment of £3. If there is Super-tax to pay on a considerable agricultural estate—and it is on the larger estates most of these houses are—we must add 13s. 6d. Super-tax, and there is also 7s. 6d. insurance, so that, without allowing anything for repairs or for Death Duties, the owner is left just 6s. 10d. out of £4. As I have pointed out, one of the consequences of this is that nobody will build houses now, and the State in order to get £3 13s. 2d. out of the pocket of the agricultural landowner has to build houses itself at a cost of £1,000 each, and impose a rent of £20 a year on the agricultural labourer instead of £4. Is that to be regarded as satisfactory finance? The owner gets practically a minus quantity, yet Somerset House declares that Income Tax is only levied on the net sum available after paying the expenses of earning the income or profit.
I will give another case. This is the case of a large property in Scotland. I have the full permission of the owner to quote it and I am prepared to hand these figures to the Chancellor of the Exchequer. The rental of this property is between £42,000 and £43,000 a year. Hon. Members may say that a man who has that income should be subject to any sort of tax. I do not know whether they will wish to go further than they have gone already, when they hear the details. Again I refer to the definition of Somerset House that necessary expenses must be deducted before you arrive at the net income upon which tax is to be levied. In 1920 the actual income of this property was £42,490. Management and maintenance, not including anything for amenities, for gardens, or anything personal to the owner, but merely business maintenance, management and repairs, amounted to £19,223, leaving a net income, which according to Somerset House is taxable, of £23,267. The Secretary of the Treasury says that such an income is so large that the tax has not to be paid out of capital. I have different opinions. On that £23,267 of net income there are rates, taxes and statutory burdens, including Ministers' stipends—which in Scotland correspond to tithes in this country—Income Tax and Super-tax, and the sum of all these burdens is £22,800, leaving to the owner £467. There are figures which any hon. Member can see. Is it possible to pay that out of income? It cannot be paid out of income. The owner of this estate
himself says that he has bean living upon sales for the last year or two. He has not large capital available to pay out of, and he has to sell land and use the money he receives to pay these taxes, the total amount of which comes to about 19s. 7d. in the £ on the taxable income. Is that enough for the hon. Members opposite?
There is yet another case which was quoted in another place not very long ago. This is the case of a mineral property, which hon. Members opposite consider should be nationalised. This is a lead mine in Lancashire, and the royalty paid to the owner is £2,718 a year. That may make hon. Members' mouths water, but that sum is obviously liable to taxation. There are no expenses chargeable against a royalty. It is not like the case of agricultural land, where there are very heavy charges for maintenance, repairs and management; it is a payment all of which nominally goes into the owners' pocket, but out of that particular sum the Income Tax and Super-tax payable was £1,400, the rates paid were £650, the Mineral Eights Duty £102, and the Excess Profits Mineral Eights Duty was £570. If you add these together you will find that in the end the owner is minus £4. He receives £2,718 in royalty, and he payed out £2,722. Can that be paid out of income?
These are concrete cases, and they are not exceptional at all. The particular estate in Scotland, to which I have referred, is most admirably managed. The owner is a man of high business qualities, who has some of the best agents and employés that can be found. His estate is not heavily charged, and it is in a specially favourable position, whereas on a large majority of estates there are charges and mortgages, and they are in a bad position. One of the principal auctioneers of the country said the other day that if anyone wanted a big country house he might have his choice of 500. This auctioneer had 300 on his own books, and could get 200 off the books of others. I do not think anybody in this House will consider that it is good for the country that all this property should lie idle, paying taxes and being of no service to the community apart from that. This can be further reinforced by anybody who moves amongst those who are in business or who are owning landed properties. They all say the same thing,
namely, "We cannot pay our taxes out of income. We either have to borrow the money from the bank, or we have to pay it out of capital, or we have to tell the taxing authorities that we cannot pay it at all." That is the position at this moment, and it is a most dangerous position from the national point of view. When we get figures up to that point, I suggest to hon. Members opposite that instead of the comparatively minor issue of whether we are paying a little too much for our tea in one direction or too much direct taxation in another, we want all to take counsel together as to how the nation is going to bear this burden at all.
We had an instance on a small scale in two Clauses which we have just passed sub silentio, and it is a warning. Why did the Chancellor of the Exchequer reduce the tax on cigars and champagne? His predecessor put the tax on in the hope of getting more revenue, and he has taken it off because he found the burden was such that it actually brought in less revenue. That is what is going to happen in the far more vital and important region of the Income Tax, once you get it up to a point where it cannot be paid over this higher area. The discouragement of this position is one of its most fatal features. People say, "It is useless. Every penny with which we would manage and develop our estates or our businesses is taken away from us, and it is useless to try to increase our income, because the only effect of doing so is to increase the burden of taxation, so that we get nothing out of it." The expression used to me by the owner of this property who sent me these figures was, "It is heartbreaking." From the point of view of hon. Gentlemen opposite and of labour generally, can there be anything more vital to them than that taxation upon industry should not be so heavy as to deprive their constituents of employment? Surely it would be better for them that the working classes, instead of having their wages reduced, should pay part of this tax themselves, so that they might realise what it is. My hon. Friend opposite the Member for Central Edinburgh (Mr. W. Graham), who studies these questions closely, suggested that it would be preferable if every person in this country paid something directly towards the taxation, but can he persuade them to do it?

Mr. J. JONES: They are doing it now.

Mr. PRETYMAN: Not directly, and that is the point. Of course, everybody pays something towards taxation who consumes any taxable article, but the hon. Member for Central Edinburgh suggested that it would be preferable if everybody paid something directly. When that was only carried down to wage-earners who were earning very large sums indeed, and they were asked to pay a tax, I think my hon. Friend will admit that the difficulty in collecting that tax has not been an encouragement to the Chancellor of the Exchequer to try and extend it any further down. Therefore, that method does not appear to be very hopeful.
The evil of this taxation goes even further than that. I think I have made my point that this tax is being paid out of capital, but there is another effect of this heavy taxation, and that is that there is a temptation to be spending capital upon amenity and personal objects rather than upon investing it in industry. If you invest it in industry and obtain an income from it, an enormous and a wholly impossible proportion of that income, or so-called income, is taken from you in taxes, but if you invest it in a picture or jewellery, you get the whole of the pleasure, and the Chancellor of the Exchequer may be said to contribute something like half of it, because he loses half his revenue on the investment which you have sold out. What is the position in regard to housing? At the present time, when a small house is to be let, a very large premium is paid as a rule, and the reason is that a man who pays £1,000 in a premium only pays income tax on the rent of the house, and he pays the £1,000 premium which he previously had in an investment. If that investment brought him in 6 per cent., and he was a Super-tax payer, half the loss of income would fall on the State and only half on himself; if he was not a Super-tax payer and was only paying 6s. in the £ Income Tax, then 3s. in every 10s. would fall on the State, and the other 7s. would fall upon him. He does not mind, if he is a man of a certain age, taking that £1,000 out of an investment and paying it as a premium on a house with a 10 or 20 years' lease, because he doubts whether he will live any longer than that, and therefore this taxation directly tends to waste and
extravagance. After all, people who spend capital in that way upon house hiring do not have to go very far for an example. They have an example in the Government's own housing scheme.
I hope the Chancellor of the Exchequer will understand that I am throwing no stones at him. I think he has succeeded to a position of the most extraordinary difficulty. Everybody in the House wishes him well and will do his utmost to support him in any effort he may make, and I merely put this to him, not to find fault with him or to suggest that he or his predecessors are responsible, but I suggest that the situation is now so wholly different from what it was before that it has got to be faced in a wholly different spirit and from a wholly different point of view. It is somewhat similar to the position in the War. What was the reason why the War dragged out so long? It was because the Allies had no plan. The only man who had a plan was Marshal Foch, and when he was given his opportunity and carried out his thought-out plan the War was very soon won. What we are doing now is to drift on with the old ideas and the old talk. I notice that this Debate on the Budget has followed almost the same lines, almost word for word, arguing about Free Trade and Tariff Reform and all the old questions, exactly as we used to debate them when we had plenty of money and plenty of time. We have now something much more serious to discuss, and that is, how the country is going to pay its way. It is a vital matter, and I suggest to the right hon. Gentleman that, just as we went perilously near losing the War because we had no plan, and won it when we had a plan, so we cannot go on drifting in this way without a plan, and it is his business and that of his advisers, between now and next Session, to think out a plan, just as Marshal Foch thought out his plan. Let him think out a plan over the whole area, by which the nation may pay its way, and there may be some hope of not drifting on with an endless vista of Income Tax, which amounts in many cases to 20s. in the pound—a hopeless position, in which there will be no effort, no revival of industry—a plan under which both the financial authorities and the nation can look ahead with some hope, and can feel that, though the burden is heavy, we have a plan for reducing it, if we put our shoulders to the wheel, and are prepared
even to sacrifice capital. I would not complain of that this year or next year if I saw daylight at the end, and we won through. But he must show us a plan. He must show the country hope. Unless he can do that, the situation will go from bad to worse, and I tremble to think what the financial and the industrial and social consequences to this country may be.

Sir R. HORNE: I greatly regret that there have not been more Members present to hear the very powerful speech which has been made by my right hon. Friend. I venture to say that the disclosures which he has made to-day have revealed, even to those of us who are intimately acquainted with the difficulties under which the taxpayers of this country are labouring at the present time, the burden of taxation as being almost too heavy to bear, and I entirely agree with my right hon. Friend that it is necessary to find some method by which we can make the incidence of taxation, and the burdens which the taxpayers have to bear, lighter in the not remote future. The case of the landed property owners which he has presented is, I am sure, an eye-opener to very many Members of this Committee. Most people are rather apt to regard the heritable proprietors of this country as the particularly fortunate people of our time, who live more or less in a style of luxury which is not the fortunate experience of the other classes. I am sure that what the right hon. Gentleman has said is sufficient to convince all of us that whatever may have been the position of these particular people in the past, it is certainly not the situation in which they find themselves to-day.
One of the illustrations which the right hon. Gentleman gave was not unknown to me. With those figures I am perfectly well acquainted, and I know that there is no exaggeration in the statement which he has made to the Committee. Out of an apparently large rent roll this landed proprietor, who is regarded as the child of smiling fortune, receives £465 in the year. I hope that what has been said about these matters will really bring home to all of us that there are privations not merely amongst those who have been referred to as the bottom dog. Hardship is being suffered amongst every class of our people to-day—upper, middle and lower classes—and all you can say about it is that we are bearing the results of a
great War, which, if we had lost, would have brought even more suffering upon us than we are enduring to-day. The hope is that we shall at least stand together, endure our difficulties together, confront them with courage and find a way through. Having said so much, I am loath to say anything in criticism of the very powerful speech to which we have listened. One illustration, however, which the right hon. Gentleman gave, I do not entirely understand. He talked of the results of the ownership of a cottage yielding a rental of £4 a year. I think he suggested that the landowner might pay in rates for such a cottage a sum of £l 14s. 2d., which he was not entitled to deduct from the rent before he was assessed for Income Tax. That is a proposition I do not understand.

Mr. PRETYMAN: It is so.

Sir R. HORNE: According to my belief, he would be entitled to deduct the amount he pays in rates before the sum is arrived at on which he is assessed.

Mr. J. JONES: Who pays it?

Sir R. HORNE: If the landowner pays the rates for the tenant, he is entitled to make that reduction before the sum assessed for Income Tax is arrived at.

Mr. PRETYMAN: Perhaps I may explain. I took this matter up very carefully, and the law is that the gross assessment for rating, and Income Tax is the rent free of usual tenant's rates, taxes, and tithe, that is, assuming the tenant pays. In this case, in arriving at the gross assessment of £4 5s. for the cottage, the assumption is that that amount would be payable to the landlord, and that the tenant would pay the rates. Therefore, if you deducted the £1 14s. 2d., which is the actual sum paid now, you would have to add it at the top, on the assumption that the tenant would pay it, and then arrive at it in this way. The cottage is let at £4 to the agricultural labourer. That is the normal rent all over the East of England, so far as I know, that is, from 1s. 6d. to 2s. a week. The cottage would be snapped up, no doubt, by other people at a higher rent, and the assessment authorities say, "You are only receiving £4 rent for this cottage, but we assess the cottage at £4 5s., on the assumption that that is the gross rent
which would be paid by a tenant who would himself pay the rates."

Sir R. HORNE: Now I can see the right hon. Gentleman's point. But let me assume that the proper rent for the cottage is £4, which represents the proper value—

Mr. PRETYMAN: Then the tenant pays the rates.

Sir R. HORNE: And that the rates are paid by the landlord. Then the view which I have given, I think, is correct, that he would be entitled to deduct the rates he pays before arriving at the sum at which he was assessed for Income Tax. The actual assessment for Income Tax would be something like £1 18s. 2d., after making allowances for repairs and the payment of rates and insurance. But, of course, if the cottage is really worth more than £4 in the way of rental, and would bring more in the market, then, perfectly properly, it must be assessed at more, because the landlord, in letting his labourer have the cottage at £4, is really giving him something in respect of wages.

Mr. G. EDWARDS: Is it not a fact that the cottages to which reference has been made are now let at 3s. per week under the Agriculture Act?

Mr. PRETYMAN: No.

Sir R. HORNE: However that may be, in point of fact, if the labourer is getting his cottage at less than the real rental value, then obviously he is probably taking less wages in consequence, and accordingly the assessment authorities do perfectly rightly in putting the cottage at the proper value. There is one other question that I venture to mention in relation to this matter, and it is this: In calculating what is left over for the landlord after he has paid everything, rates probably form a very serious consideration. Everyone knows that the heritable property of this country bears a very large burden in the shape of rates, probably at the present time a very undue burden. I do not express any opinion upon that, though the question has been considered sufficiently serious for inquiries to be made, and at the present time there are inquiries going on both in England and Scotland in regard to rates on land One other factor enters into this
consideration. In the past it has always been held that the holding of landed property in this country is something for which a man pays more than would be paid for any ordinary investment. In that respect the capital locked up in the land has never had its proper return, for the reason, possibly, that a man will sacrifice something for what is called the pride of ownership. This must be taken into consideration before we arrive at a settlement. Obviously, from what the right hon. Gentleman has said, and what I myself have indicated, the problem is one of very great dimensions, and I hope the Committee will forgive me for not entering into any elaborate reply to the speech the right hon. Gentleman has made, because it deserves more thought than I have been able to give to it by merely listening to his speech. I, however, do assure the right hon. Gentleman and the Committee that the whole problem, as presented this afternoon, is one that needs the utmost consideration which I can give to it before the period comes for a new Budget.

9.0 P.M.

Major STEEL: I should like to say a few words, not necessarily in support of the Amendment, but in support of the right hon. Gentleman the Member for Chelmsford (Mr. Pretyman), the fair way in which he has put the matter, and the way in which high taxation is affecting agricultural land. I am sure we were all very much pleased at the very sympathetic reply of the Chancellor of the Exchequer, and with the hope that he expressed that he will try to find some scheme whereby the present burdens might be made lighter. While every industry is groaning under the present rate of taxation, I do feel that the position of agricultural land and the position of the agricultural landowner is even a worse one than that of any industry in the whole country. There are two reasons for this. The owner of agricultural land is not only saddled with enormously high taxes, taxes which go into the Treasury, but he is also saddled with enormously increased rates. There is no doubt about it, the rates fall far more severely on the agricultural landowner than the owner of any other industry in the country.
Certainly that is the case in Scotland, where the owners of land pay such a large proportion. I think I would be right in
saying that they pay fully more than half the total sum raised in rates. The owners in Scotland have also been saddled with very large additional burdens in the form of stipends which have increased enormously since the beginning of the War. The whole thing is that the present burdens on agricultural land are so great that when they have all been paid, Income Tax paid, rates paid, stipends paid, there is very little money left for the general buildings and equipment of the farms on the various estates, and they cannot be kept up in a proper state of repair. We have got to look at this question not only from the point of view of the owner and to try and do justice to the owner, but from the national point of view. Unless more money can be left with which to keep up the buildings and fences they are bound gradually to fall into a bad state of repair, and the result will be that the productivity of the soil will be impaired.
The Committee I think, cannot have realised, until the speech of the right lion. Gentleman, what are the enormous burdens at the present time falling upon land. I have been given a few figures from a friend of mine who has a small estate in Scotland. I am at liberty to give these to the House. I know very well how much the House detests figures, but I would just ask permission to give these few which, I think, illustrate very clearly what the present position means This small estate in Scotland has a rental of £2,350. Last year the repairs and upkeep came to £956. This gross rental of £2,350 does not include any assessable rental on the mansion house, or garden, or stables, nor does the £956 for repairs include any money spent on what might be called amenities. It does not include any money spent on the owner's garden or stable, or any luxury of that sort. The rental is entirely the rental of the farm, and the money spent on repairs is entirely money spent on keeping up the farm buildings and fences. Insurance comes to £39, making a total of £995. If you deduct that from £2,350, it leaves you with £1,355, which is the net income of the estate. The burdens on that £1,355 last year were as follows: There was, first of all, stipend, £244; owner's rates, £501; Income Tax and Property Tax together came to £411; thus rates, taxes, and stipend together accounted for £1,155
out of the net income of £1,355. There thus went into the owner's pockets £200. That does not take into account money which has to be spent in Super-tax, nor does it take into account provision for indebtedness. There is no money left in that estate to keep the buildings in that really efficient state of repair, which they ought to be kept in if the maximum is to be got out of the soil. I can give two other small sets of figures from another estate, which may be regarded as typical farms, and one shows a credit balance and the other a debit balance on last year's account. The figures are practically in the same proportion as those which I have just given. In the case of the first farm the rent is £300. The repairs last year were £72, the management, insurance, and small sundry payments amounted to another £13. The outgoings were £85 on that farm rented at £300, leaving a net income of £215 to the owner, and out of that he paid £63 in Income or Property Tax and another £60 in rates, leaving him with a balance of £92, exclusive, of Super-tax.
In the second case the rent was £110. It is a farm which I know very well myself, and it was not in a bad state of repair. Last year I think a granary had to be restored, and there were some small joinery repairs, but at the present cost of repairs you can do very little without running up a very big bill. The repairs came to £125 and the insurance and management expenses came to £5, and therefore the total repairs and insurance and management Game to £130 on a farm at a rental of £110, leaving a debit balance of £20. The owner had not only this debit on account of repairs but he had to pay £23 in Income Tax and £22 in rates. If you add that to the debit which I have already stated, you get a total debit of £65 on that farm exclusive of Super-tax. I hope these figures will convince the Chancellor of the Exchequer that the present position is unsound and cannot continue for many years. Unless some relief can be given to agricultural land it must inevitably follow that through lack of money, and for no other reason, the buildings and the fences and the general equipment of the farms of the country cannot be retained in that high state of efficiency, which is necessary if you are going to have the maximum production out of the soil.

Sir F. BANBURY: I should like to associate myself with the right hon. Gentleman the Member for Chelmsford (Mr. Pretyman) on this subject, and I am very sorry for the Chancellor of the Exchequer when I consider the burden cast upon his shoulders, although I am certain he is desirous of doing the best he can. The right hon. Gentleman is in one of the most difficult positions that has arisen in the last hundred years, and it would require more than a superman, if such a person ever existed, to pull us out of the mire. I did not hear the whole of the speech of my right hon. Friend, but I heard the end of it and I am acquainted with the figures which, I understand, he gave to the House. I have also listened with great interest to the figures given by the hon. Member opposite (Major Steel). As a landlord myself, although I have not the actual figures, because I keep all the accounts myself and I have not time to take them out showing the details which the hon. Gentleman opposite and my right hon. Friend have given, yet I am perfectly certain if I were to do so what the result would be. I have not done so because I do not want to know what the result is, but I know it is not satisfactory.
I have in mind the example of a personal estate where the result is probably an exception and it is nearly as bad as the figures we have just listened to. My right hon. Friend said that Marshal Foch had a plan, and I have got a plan. I hope my plan is as good as that of Marshal Foch, which succeeded, and it was a better plan than that of General Trochu, which did not succeed. My plan is one that I have advocated often, and there is no other. Money does not descend like manna from Heaven, and you cannot dig it out of the ground. My plan is the only one which everybody has advocated from time immemorial, and it is: reduce your expenditure. That is the only way. I am quite serious. You must reduce your expenditure. There is no other way. If you have got an expenditure of £1,000 and an income of £800, and you cannot increase that income of £800, what you have to do if you want to keep out of bankruptcy and employ my hon. and learned Friend is, you must reduce your expenditure to £800, and if you have any
difficulty in obtaining that £800, you should still further reduce your expenditure until it meets your income.
That is a very simple solution, and it does not require any great amount of brains, but it is the only solution which can remedy the state of affairs which has been alluded to. Expenditure has got to be reduced because it means that a certain number of people will have to forgo something they are having at the present moment, but we have all to suffer and we all must suffer. The classes to which my right hon. Friend and the hon Gentleman opposite alluded have suffered. They suffered during the War, and they continue to suffer after the War, and other classes who have had a good time cannot expect to go on in the same way they have gone on before. I earnestly trust my right hon. Friend the new Chancellor of the Exchequer will bear in mind that there is no heroic remedy for this state of things. Bills and Acts of Parliament will not touch this thing. There is only one way, and that is to face the situation and say that we must cut our coat according to our cloth.

Mr. J. JONES: I only wish to add my contribution to the speech of the right hon. Baronet the Member for the City (Sir F. Banbury), and to express my sympathy with him in his lamentation regarding the position of the poor rich. I am going to speak on behalf of the rich poor. I have heard in the statement made, in connection with the ownership of agricultural land, of the existence of a very serious condition of affairs amongst those people who are landowners only, and who depend for their incomes on what they get from the land, without having to work it. The land of Great Britain does not belong to people, however, who merely get revenues from the land. It has become the preserve of the retired mustard dealer and of the soap boiler, of people who have become rich by the exploitation of the workers in the towns, and who have now gone into the country, and become the new aristocracy much to the dislike of the old aristocracy. A gentleman who gets a title as the result of giving donations to institutions not altogether honourable eventually becomes a member of the aristocracy as we understand it. I am not an expert in figures. I only know figures in the streets, and consequently I cannot enter into competition in this Debate on
national income and expenditure. There is however one thing I have noticed about the figures which have been presented, and that is when it comes to the final analysis, the only person who pays is the man who produces. The owner complains of over taxation. The labourer's cottage is rented at £4 a year, and we are told that only 6s. is left over for the poor landlord. But who has paid the £4? The landlord may be poor, but the labourer is poorer. I venture to suggest that the man who pays the rent is the man who really pays, and although the landlord may be poor because he gets no more than 6s. out of his bargain, the labourer is poorer because at the end of the year he has not 6s. left over to maintain his family.
Then we have figures presented to us on national income and Income Tax. I now happen to be an Income Tax payer for the first time in my life. I am not grumbling. Give me the income, and I will pay the tax. I always find that the people who grumble most about paying Income Tax are those who have most to play with, and when an hon. Gentleman opposite twitted us with objecting to the workers paying Income Tax, let me say at once we do not object to it. We are in favour of direct taxation, but what we do object to is the double-barrelled system of taxation, a system which enables you to tax our wages, and at the same time retain the system of indirect taxation. The things we use are taxed more in proportion than the things used by people in a better position than we are. The rich man, according to his income, is not taxed so highly as the poor man. Again, in the figures which have been presented to us to-day, we have had no real analysis of the variations in Income Tax. A landlord may pay £1,000 in Income Tax, but if you analyse the figures you will find that lower incomes are taxed proportionately higher.
We have a right to say, on behalf of the man who works, that any relief should go to those who earn what income they receive. There is no unearned increment so far as the worker is concerned. Consequently, the taxation in his case is not merely a matter of paying his own taxation, but, owing to the unfortunate situation in which he is, he helps to pay other people's taxes as well. It is not the producer who grumbles at having to pay the taxation. I wish he would
grumble more. So far as we are concerned, we want to see the abolition of indirect taxation. We want everyone to pay direct taxation according to his income, and if there is to be any differentiation at all, preference should be given to those who work for what they get, and not to those who merely take from other people and grumble at having to pay on what they receive. Something has been said about Karl Marx. I wish those who talk so much about him would try to understand his writings. We only mention him on these Benches in order to refute statements made on the other side. But what did he demonstrate in the matter of taxation? That indirect taxation was a handicap upon production, and that real taxation could only be based on the capacity of the taxpayer to pay.
When you begin to talk of the taxpayer you immediately discover there is an evil in the method of taxing. The landlord objects that he is too heavily taxed. So does the City man—a lawyer, a solicitor, or even a bookmaker who may have an office in the City, and may make thousands a year while employing practically no labour. So, too, does a person with a big industrial establishment employing a large amount of labour. They are all taxed on a similar basis. But how does anybody know what some of these gentlemen earn? How are you going to find out? If I occupied a factory in the East End of London, everyone would know at what the property was assessed, and what amount of business I did. But in regard to these other people, you may have an estimate of their profits, but they make out the Income Tax returns, and it is like saying, "You do the fighting, and I will do the accounting." We on these benches sympathise with hon. Gentlemen opposite in the heavy penalties they have to bear on account of the ownership of land. If they are dissatisfied, however, let them hand it over to the nation. If the land is such a terrible burden to the people who now have it, we are willing to relieve them of the responsibility as soon as we can get rid of them. If they cannot work the land, let the nation own it for the benefit of the people. We want the nation to become an organiser of national industry on behalf of the people, and
those people who now grumble will cease to do so, because they will have nothing to pay.

Mr. PRETYMAN: I should like to withdraw the Amendment, and to thank my right hon. Friend for his very sympathetic reply, which was all that I expected from him. We are all of opinion that for him to think about this problem, which is a very serious one, will be far preferable to his getting up and making a hasty speech. I am quite satisfied with the reply he has given, and I beg leave to withdraw.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. RAWLINSON: This Debate has turned very largely on the wider question of the Income Tax, but also on the slightly narrower question about the way it affects land apart from personal property. I am not going into that, but I should like to call the attention of the Chancellor of the Exchequer to one or two minor ways in which land is affected. I refer more particularly to the case of land held by charities and other public bodies of that kind. I am not going to labour the point now, because I shall have a new Clause which will come up later on. At the present time great injustice is done to charities of various kinds which occupy land. If they let the land they are free from Income Tax. If they occupy it they are liable for Income Tax. The Income Tax Commissioners have already reported on this, and have advised that they should be exempted from taxation. In paragraph 308 of their Report they recommend that, after a certain time has passed by, "premises owned and occupied by a charitable body should be exempt from Income Tax under Schedule A." This is an injustice which has existed for a long time. The Chancellor of the Exchequer has had difficulty in dealing with it, and I venture to press it on his consideration between now and the time when the new Clauses come up, next Monday. There are other minor ways in which land is adversely affected by the Income Tax. I would draw the right hon. Gentleman's attention to the very urgent case of charitable land of the type in which I am particularly interested, such as the London playing fields and similar objects. The National Lifeboat Institution and other bodies are very severely hit by the
large taxation which falls on the land which they occupy simply for the purposes of charity. I would ask the right hon. Gentleman, to give his close consideration to this matter.

Mr. INSKIP: I hope I may be allowed to reinforce what the hon. and learned Gentleman has said. With reference to one institution he has mentioned, the Committee will appreciate the really extravagant nature of the anomaly which requires the National Lifeboat Institution, for instance, to pay Income Tax on the whole of its buildings in which its apparatus, including the lifeboats, is housed. It has also to pay Income Tax on the premises it occupies in Charing Cross Road, whereas it would not be liable to Income Tax on any of these buildings if it rented them from third parties. That is an anomaly which the Committee will appreciate, and which ought not to be allowed to continue. The Royal Commission has directed attention to it, and has made a recommendation. The case of some charities may be said to be different from that I have mentioned, but what I want my right hon. Friend to do is not to allow the necessity of raising revenue, and the large question of charitable institutions, to prevent him from dealing with the position of such institutions—I suppose there will be only one or two—as the National Lifeboat Institution. If these institutions come to an end, then by Act of Parliament, by the Merchant Shipping Act of 1894, the whole of the cost of maintaining the lifeboats in this country would fall on the Exchequer. At present the lifeboat service is maintained by the charitable contributions of the public, at a cost which is extremely economical and is much lower than the cost of maintaining the same service, for instance, in the United States.
I am sure the right hon. Gentleman regards the work of this institution with sympathy, as we all do, and if he will be good enough to deal with its position and with that of one or two similar bodies I am certain no one in this Committee will think he is taking anything but a right course. It is a perfect anomaly that if this institution lets its building to a third party and went into another building it would be free from Income Tax, whereas because it owns and occupies its own building it has to pay the tax, while all the time it is doing work for the National Exchequer. I shall be exceedingly dis-
appointed if, before another year, the right hon. Gentleman's advisers have not enabled him to take this anomaly from the Statute Book.

CLAUSE 18.—(Declaration as to ss. 43 and 44 of 8 & 9 Geo. 5. c. 40.)

(1) For the purpose of removing doubts it is hereby declared that Sections forty-three and forty-four of the Income Tax Act, 1918 (which grant certain reliefs for any year of assessment as respects which they are respectively continued in force by any Act), were not continued in force for the year 1920–21, and the said Sections are hereby repealed.

(2) If, in any case, any person has been assessed or charged to tax (including Super-tax) or has been allowed relief from tax on the basis that the said Sections were continued in force for the year 1920–21, all such adjustments, amendments of assessments, and payments of tax shall be made as are necessary for securing that that person shall be charged to and pay tax (including Super-tax) on the basis that the said Sections were not continued in force for the said year.

Mr. HOLMES: I beg to move, in Subsection (1), to leave out the word "not" ["were not continued in force"].
It is not often that an Amendment to omit the word "not" is in order in the ordinary way, because such an Amendment would generally be merely a negative of the Clause. In the present case the deletion of the word "not" is not of that nature. The Clause says:
For the purpose of removing doubts it is hereby declared that Sections forty-three and forty-four of the Income Tax Act, 1918,…were not continued in force for the year 1920–21, and the said Sections are hereby repealed.
The object of my Amendment is to make the Clause state that they "were continued in force during the years 1920–21," and the remaining words are, by a subsequent Amendment, struck out. It would be well to remind the Committee of the actual words of Section 43 of the Income Tax Act, 1918. It reads as follows:
Where it is proved to the satisfaction of the commissioners by whom the assessment was made that a person assessed under Schedule D has suffered a diminution of profits or gains due to circumstances attributable directly or indirectly to the present War, whether or not those circumstances are a specific cause within the meaning of the provision relating to relief in respect of deprivation or loss of profits or gains chargeable under that Schedule, the following provisions shall apply, and the diminu-
tion of profits or gains shall not entitle the person to relief under that provision: —

(a) If within or at the end of any year of assessment as respects which this Section is continued in force by any Act, the profits or gains during that year of the person assessed are found and shown by him to have fallen short of the sum on which the assessment was made for that year, the assessment shall be amended as the case may require, and, if the tax charged has been paid, any tax overpaid shall be repaid in like manner as other repayments under this Act:
(b) Provided that no reduction or repayment shall be made unless the profits of the year of assessment are proved to be less than the profits for one year on the average of the last three years, including the year of assessment, nor shall any relief granted extend to any greater amount than the difference between the sum on which the assessment was made and such average profits for one year."
Perhaps the Committee will allow me to paraphrase that in two sentences. It means that any person, firm or company, whose profits are reduced owing to circumstances attributable directly or indirectly to the War, can claim to be charged on the average of three years ending in the year of assessment instead of on the average of the previous three years. For example, a firm's profit amounted in 1917 to £3,000, in 1918 to £3,500, in 1919 to £2,000, and in 1920 to £l,500. For the year 1920–21 it would, in the ordinary way, be assessed on the average of 1917, 1918, and 1919; but under Section 43, if it could show that the diminution in profits was due to the War, the firm would have the right to claim to be assessed on the average of 1918, 1919, and 1920. The assessment, however, would not be reduced below the amount of the 1920 profit. The important points to be noted with regard to Section 43 are, firstly, that the taxpayer must prove that he has suffered a diminution of profits or gains due to circumstances attributable directly or indirectly to the War; and, secondly, that the relief only applies in a year in which Section 43 is continued in force by any Act of Parliament. Section 44 of the Income Tax Act of 1918 is as follows:
If any individual who has been assessed or charged to tax for any year of assessment as respects which this Section is continued in force by any Act claims and proves in manner provided by this Act that his actual income from all sources for that year is less by more than 10 per cent. than the income on which he has been so assessed and charged, he shall be entitled to repayment of such part of any tax paid by him either by way
of deduction or otherwise as is equal to the difference between the amount of the tax so paid and the amount which would have been so paid if he had been assessed or charged on his actual income for the said year.
That, briefly paraphrased, means that if any individual proves that his actual income from all sources is less by 10 per cent. than the income on which he has been assessed on the three years' average, he is entitled to be charged upon his actual income and to obtain repayment of the difference. The important points with regard to this Section are, firstly, that there is no reference to the War, and, secondly, that, as in the case of Section 43, the relief only applies to years in which the Section is specifically continued in force by an Act of Parliament. These two Sections were re-enacted for the year 1919–20 by Section 15 of the Finance Act of 1919. When the Finance Bill of 1920 was introduced, it was found that, not merely were they not re-enacted, but that in the Schedule of that Act there was a provision for their repeal. During the Committee stage of the Bill, this time last year, the Chancellor of the Exchequer accepted an Amendment to withdraw from the Schedule the repeal of those Clauses. The Clauses, therefore, still remain in force in any year if they are specifically re-enacted for that particular year. It is possible to miss them for one year and re-introduce them another year. On the Report stage an Amendment, by way of a new Clause consisting of the exact words used in the Finance Act of 1919, was moved by myself and seconded by the right hon. Baronet (Sir F. Banbury). It was defeated on a Division by the Chancellor. I say that advisedly, because the Debate took place in a very small House, the Chancellor said that he could not accept the Clause, the Division bells rang, and, by the Whips standing at the door and directing Members in the usual way into the Lobby, the new Clause was defeated. The reason why I say that it was done by the Chancellor and the Whips is that on the Paper to-day are the names of a number of hon. Members who are now opposing the repeal of Sections 43 and 44, but who went into the Lobby last year and voted for their repeal and against the new Clause for which the right hon. Baronet and myself were responsible. I am sure that the House did not then grasp the significance or the importance of the matter. Other-
wise this right of the taxpayer, which is of vital importance to the industry of the country for the next two years, would not have been taken away from him in such a light-hearted way. While it was, undoubtedly, the intention of the Chancellor of the Exchequer that these Clauses should not be re-enacted for 1920–21, there is grave doubt in law whether he actually succeeded in his object. I mentioned a few moments ago that both Sections 43 and 44 remain in force in any year in which they are specifically re-enacted in the Finance Act or any other Act of Parliament. These two Clauses were specifically re-enacted in the Finance Act of 1919. In the Finance Act, 1920, Section 14 (2) reads as follows:
All such enactments relating to Income Tax as were in force with respect to duties of Income Tax granted for the year 1919–20 shall have full force and effect with respect to and duties of Income Tax granted by thi3 Act.
The general public are not concerned with what takes place in this House. They are concerned with the Act of Parliament that finally emerges from the House of Lords. In the course of my professional business I have often tried to persuade the Inland Revenue officials to accept my interpretation of a Clause in the Finance Bill by quoting the speeches made by the Chancellor of the Exchequer, or the Financial Secretary to the Treasury for the time being; but the Inland Revenue officials, no doubt perfectly correctly, have said that they must go by the Act of Parliament, and not by the speeches either of the Chancellor of the Exchequer or of the Financial Secretary in the House. It is the same in this case. The Chancellor of the Exchequer last year intended that Sections 43 and 44 should not be re-enacted, but by Section 14 (2) it is considered that they have been re-enacted. I have had the privilege of reading Counsel's opinion which was obtained by a, well-known firm in the City of London from two of the most eminent Counsel in the country, and their opinion was unanimously and strongly in support of the contention that Sections 43 and 44 were re-enacted. This particular company decided to bring a test case, after they had lodged a claim upon this point, and the Inland Revenue authorities agreed. This test case came before the General Commissioners of Income Tax for the City of London, and the decision of the Commis-
sioners, which was given on the 10th May of this year, was as follows:
The Commissioners, having regard to the provisions of Section 14 (2) of the Finance Act, 1920, and to the absence from the list of enactments repealed contained in the Fourth Schedule of that Act of Section 43 of the Finance Act of 1918 are of the opinion that such last-mentioned Section is continued in force for the year in respect of which the application is made.
The Inspector of Taxes expressed dissatisfaction with this decision, and is requesting that a case be stated. If I understand it rightly, this matter, if not agreed to by the House, will go to the High Court, and, whether the Inland Revenue or the taxpayer wins, the case will go to the House of Lords, so that it will be months before the matter is cleared up. The Inland Revenue are to-day bringing forward this Clause, and really are saying that, so far as the legal decisions up to the present time are concerned, they are against us. Sections 43 and 44 were re-enacted for 1920–21.

Sir R. HORNE: There are six decisions by Commissioners, three one way and three the other, but none has yet gone to a court of law.

Mr. HOLMES: Perhaps I used the word "legal" by mistake. At any rate, there have been six decisions by Commissioners, three each way. The decision of the Commissioners of the City of London is by far the most important. Having read the opinion of distinguished counsel who were consulted in the matter, and conducted the case on behalf of the taxpayer in the Court, while, of course, they are sometimes wrong, I believe it is by no means certain that the Inland Revenue will succeed either in the High Court or if they take the matter higher. At any rate, so far as the taxpayer in the City of London is concerned, he is of opinion that Sections 43 and 44 were re-enacted in 1920–21, and the Chancellor of the Exchequer is asking the Committee to reverse that and to say that they were not. I do not want to dwell too much on the point, though it is very important, that this will in effect be retrospective legislation, which, I believe, the House has always been reluctant to grant. But, beyond that, I will put it to the Chancellor of the Exchequer that if he maintains this Section 18 he is going to cause a large number of the big businesses to pay a
tax, not of 6s. in the £, but 10s., 15s., 20s., and even 25s. He is going to make them pay in the current year and next year, not on the profits they are now making, but on the average of the large profits they made three years ago. The country is short of money. Many businesses have had to shut down because they had not money in their banks to pay wages. When industry commences again in order to get their men going again raw materials will have to be bought and wages will have to be paid, and at whatever rate you take money for taxation you prevent businesses buying raw materials and paying wages. The effect must be that if you maintain these Sections 43 and 44 you will retard the recovery of the even flow of industry. If the Government had continued the Revenue Bill and abolished the three years' average from 1922–23, the abolition of these Sections would not have been so serious, for it would only have meant for two years. But the Chancellor of the Exchequer has not only refused Sections 43 and 44 for last year, and for this year, but he is going to say, "We are still going to continue the three years' average because we have abandoned the Revenue Bill." I put it to the Committee on these various grounds, firstly, that this is retrospective legislation, and, secondly, because you are going to overtax people and so prevent the recovery of industry, that we ought not to allow the Chancellor of the Exchequer to have this Clause, and to prevent Sections 43 and 44 being enforced for 1920–21.

Sir F. BANBURY: The hon. Member has put the case so clearly that I do not think it is necessary to say much. But there is one point which he has forgotten, namely, that by Section 133 of the Income Tax Act, 1842, the privilege for which we are contending was allowed to the Income Tax payer up to the year 1907, in which year the right hon. Gentleman the Member for Paisley (Mr. Asquith) repealed that Section, and I at that time opposed it. The only argument the right hon. Gentleman could bring forward— and at that time the Income Tax was 1s. or 1s. 6d., or something of that sort, and Super-tax was non-existent—was that people were beginning to be aware of the existence of this Section and were putting it into operation to the detriment of the Exchequer. That was not a very good argument. Either the Clause was right
or it was wrong, and the fact that people were availing themselves of it simply showed that profits were decreasing, and therefore they were naturally anxious to avail themselves of a Clause which enacted that they were not to pay Income Tax on a sum greater than they actually received. I never gave up hope after 1907, and on nearly every occasion I endeavoured to get the Clause re-enacted. In 1915 I succeeded in inducing Mr. McKenna to put these Sections 43 and 44 in. Last year an attempt was made by the then Chancellor of the Exchequer to take them out, and in Committee he did what he thought did take them out of the Bill. Then on the Report stage the hon. Gentleman and myself moved an Amendment and we were defeated. I know my right hon. Friend's defence when we talk about retrospective legislation. He says it is not retrospective because it was the intention of the House to take it out. It was the intention of the Government, and it was backed up by a majority of the House, who probably did not know what they were voting about. But supposing that was so. I will give my right hon. Friend every advantage in the argument. Are they then to say that everyone who thought he was entitled to this advantage is to be penalised because the Government made a mistake? That seems to be a quite untenable proposition.
What ought the Government to do so far as regards the retrospective legislation from their point of view? My right hon. Friend pointed out that there had not been a legal decision. The decision was given by the general Commissioners of the City of London. I do not put them upon the plane of the eminent lawyers who sit around me or on that Bench, but still they are more or less common-sense people and they have some practice and some knowledge in these matters, and I do not think they would give a decision unless they were more or less convinced that it was right. But if my right hon. Friend is so convinced that he is right and they are wrong, why does he want to repeal the decision? Let him go to the courts. He has the Attorney-General. You could not have a better man to present a case, especially if it is a bad case, and therefore why not go to the courts and show that the Government did not make a mistake last year, but did the right thing? The only inference that the
common-sense man can draw is that the Government know they are wrong, and that if they went to the courts they would be defeated. Therefore they do what has been the prevailing practice in late years, that when they have made a mistake and they want to alter a decision which has been given against them they come to this House to set aside a judgment of the law. In this case it was not the law. In other cases it has been a decision of the law. That is quite wrong. That deals with the retrospective part.
I come to the part of the Amendment which would enact this for the present year. Is it right that a man who has to pay 6s. in the £ Income Tax and possibly 4s. or even more Super-tax should only be asked to pay on what he gets? Why should he be asked to pay on something which he does not get?

Sir R. HORNE: There is nothing in the Amendment about carrying this matter on for the present year.

Mr. HOLMES: There must be a new Clause for that.

Sir F. BANBURY: If there be nothing in the Amendment to that end, I will see that there is one put on the Paper. Is it just that a man should be asked to pay upon an income which he has never received? It is not just, and it is quite impossible that you should go on doing this sort of thing. On the last Amendment I did not allude to a case that was brought to my notice a few days ago with regard to the effect of Income Tax and Super-tax upon personal property. We had a very interesting Debate upon the last Amendment as to the effect on real property. I will give particulars of figures concerning personal property. I admit at once that the case which I am about to give is an exceptional one. It is a case which has been given to me by a firm in the City, and I am perfectly willing to give the name to my right hon. Friend. Although I believe it is an exceptional case, there are, no doubt, other cases like it. The letter says:
We believe you are opposing the provision in the Finance Bill now before Parliament by which it is proposed to deprive the taxpayer as from the year commencing 5th April, 1920, the relief afforded by Section 44 of the Income Tax Act, 1918.…We have a client, a lady, who will be very hard hit by the proposed change in the law, and the results in her case are such that we venture to send you the actual figures in the
hope that they may be of use to you in opposing legislation which will produce such a cruel injustice on our client, and no doubt also on many other persons
Our client, prior to the War, derived some three-fourths of her income from abroad, and owing to the fall - in the exchange her income is now reduced to less than a tenth of what it U6ed to be. This income is assessed on a three years' average, and for the year ending 5th April, 1921, the assessment figure is £1,734 11s.
Not the income of a millionaire, clearly.
The Income Tax on it is £520 7s. 3d., while her actual income for that year amounted to £263.
So that she was actually called upon to pay Income Tax amounting to £520 7s. 3d. upon an income which amounted to £263.
The following statement shows our client's actual total income for the year ending 5th April, 1921:

£
s.
d.


Foreign income, gross income
263
0
0


Other income, of which £50 was received free of tax and will be taxed the following year
1,380
13
3


making a total of
1,643
13
3


Income Tax
919
10
11


Deduct relief granted in respect of personal allowance and differentiation relief
74
5
0


Income Tax at 6s. in the £ on the £50 received free of tax
15
0
0


making a gross income of
1,643
13
3


Income Tax
860
5
11


Add Super-tax
100
10
0


making a gross income of
1,643
13
3

out of which £960 15s. 11d. has to be paid in Income Tax and Super-tax…Our client's income is mostly settled. She has very little capital of her own, and taxation of this kind spells ruin. We are aware that 'hard cases make bad law,' but we have no reason to suppose that our client's is an isolated case as many people must be similarly suffering from the fall in the foreign exchanges, not to mention the collapse of trade, and we venture to think that if the House of Commons realise what results the proposals in the present Finance Bill will have if passed into law, they will see to it that the obnoxious provisions are deleted from the Bill."

10.0 P.M.

I give this case just as it has been sent to me. I know from experience that very large numbers of people engaged in business in the City and else where are not able to pay out of their profits the Income Tax and Super-tax which is imposed upon them, and they have to go to the banks and borrow. I do not want to go into a general discussion on that, we had that on the last Amendment. I do ask my right hon. Friends to agree to do a
simple act of justice, namely, that where a person receives a certain sum, on that sum and on that sum alone, Income Tax and Super-tax shall be paid.

Sir R. HORNE: If you take any period in our Income Tax history, it would be easy to produce cases just as hard as that which the right hon. Gentleman has mentioned. At all times when the Income Tax assessment has been based on a three years' average you will find a large number of people whose income in any particular year was not so much as that upon which they have been assessed. Ai any period during the last 50 years you could have found innumerable cases just as poignant and just as bitter as the case quoted by the right hon. Baronet.

Mr. HOLMES: But they had the remedy up to 1907 of Section 133 of the Act of 1842.

Sir R. HORNE: I am coming to that. I have been dealing with the citation of a particular case. I will come in a moment to Section 133 of the Act of 1842. As to the attitude of the Government in this matter, I say at once that the point is not one on which I can give way, and for reasons which I will tell to the Committee. This is not retrospective legislation. It is legislation to make clear what we have done, and it has been brought about because of a certain confusion which has arisen in people's minds. What we anticipate, if nothing is done under such a Clause as I have now put forward, is a course of protracted litigation. As my hon. Friend opposite said, this is a class of case which undoubtedly will be brought not merely to the Court of Appeal, but ultimately to the House of Lords. What we have got to anticipate for the next two years, if nothing is done, is that we shall have continuous litigation going on. Every person who is in any way restricted as to the amount of money that he has at the moment will put forward an application of this kind, all accounts will be held up, and you can imagine the state we shall be in from the revenue point of view with innumerable cases pending before courts, waiting upon a decision which we may not have for the next two years. This is a condition of things which this Committee would not wish to see protracted". It means for one thing—I am not putting this forward on the merits of the case—a loss of £12,000,000 this year and considerably more next year, if this kind of litiga-
tion were to be continued. What we desire is to get rid of that confusion.
May I bring back the mind of the Committee to what happened in this House last year? These two particular Clauses were not both in the old Act of 1842. Section 44 did not come from the old Act of 1842, and Section 43 did not provide what the right hon. Baronet seems to think it did, that in having his income assessed a person is entitled to substitute the amount which he actually earned in the year. What Section 43 of the Act of 1918, which was copied from the old Act of 1842, provided was that a person who had not made so much in the year as he had been assessed at, could bring into consideration the actual year in which he was being assessed, but it did not give him the assessment upon the particular year in question. It only gave him the assessment on the average of that year and the two preceding years instead of on the average of the three preceding years, and he might still be assessed at a sum considerably higher than that which he actually earned. It was not until the year 1916 we got the provision which you will find in Section 44 of the Act of 1918 which provides that if a particular individual did not earn within 10 per cent. of the average on which he was being assessed, he could then claim to be assessed upon the actual earnings of that year. Therefore when the right hon. Baronet tells us that all through these years people could be assessed on the actual earnings of the year, he is entirely in error.
Going back to Section 43, that disappeared in the year 1907. A very strong Committee was appointed, including several persons notable at that period, to take into consideration the basis of assessment. That Committee reported that the relief granted by Section 43 should be discontinued because it gave an entirely improper option. It allowed the taxpayer, when he was making large profits, to take the average of the three years and get off with a less assessment of Income Tax than on his earnings for the year, but then if he did not do so well in a particular year he could immediately bring that year into consideration, with a view of escaping the assessment to which he was properly liable. Obviously if we have a uniform system of three years' average injustice is not done. If you give an option to the taxpayer to bring into calculation
his bad years when it suits him, you reduce the amount which properly he ought to pay over a space of time. This was seen during the War. We know now that the State has got £100,000,000 less by way of Income Tax out of the taxpayers of the country than it would have got if it had taken the particular year instead of the three years' average. Now the contention is when the taxpayer had the benefit of the three years' average during that period he should be allowed to come forward now in times of depression and pay less than he really ought to pay.
Last year the House had the Report of the Royal Commission on Income Tax, which recommended the abolition of war reliefs. When the Chancellor of the Exchequer brought forward the Finance Bill there were two points arising out of this matter. First in the schedule there was a definite repeal of Sections 43 and 44 of the Act of 1918. There was also an omission in the general body of the Bill of any suggestion of continuing the two sections 43 and 44. These two Sections contain in the body of them words which show that they can only be carried on if they are specifically continued, so that you have a definite repeal of the Section and the absence of any suggestion of their continuance. On last year's Finance Bill my hon. Friend the Member for Derby came forward and moved that the direction as to repeal should be taken out. The Chancellor of the Exchequer pointed out that that would serve no purpose unless there were Sections in the body of the Bill by which these Sections were continued. He agreed as a matter of form, in order that my hon. Friend might raise the matter on the Report stage, to allow the Section repealing the two Sections to be deleted, but making perfectly clear that he was going to oppose the continuance of these Sections. When the matter came to be discussed upon Report stage, my hon. Friend the Member for Derby specifically moved that Sections 43 and 44 of the 1918 Act should continue in force. There was a discussion upon the matter, in which the hon. Gentleman and the right hon. Baronet spoke, and a Division was taken in which 41 votes were given for continuing these two Sections and 196 against. It is no good telling us that all the Members were not present to hear the Debate. All Members are not present to
hear the Debate now, and one knows that a great many things are debated in this House when not everybody is present. There is the definite decision of the House on the specific proposition. No one can say in face of it that the House did not decide that these two Sections were repealed.

Mr. D. HERBERT: The Commissioners say so.

Sir R. HORNE: Some Commissioners have decided one way and some have decided another way. It is not my duty to express views on the law, especially when I am not paid for it. As far as I can understand it, what was done by some Commissioners was to proceed upon a general Clause in the Finance Bill, a Clause which appears in every Finance Bill, re-enacting the ordinary, the routine provisions of the previous Finance Bill. They evidently sought to construe that particular Section as re-enacting provisions which the House had definitely refused to re-enact. That really is the position. Accordingly, I speak with the utmost confidence, in so far as we can say that anything is certain in the law, as to what is the meaning of the Finance Act, 1920. Personally I have no doubt about it, but I do not contemplate with any satisfaction a perpetual series of litigations. If money is to be spent, with every regard for my own profession, I would much rather it was spent to pay taxes to the Exchequer than to pay bills of costs. It was only going to create a confusion which could not be justified if we are to do our duty. Accordingly we have brought forward this Section in order to clear up doubts. It will have the effect of clearing away all the difficulties with which we are confronted at present. Perhaps it is worth while to inform the Committee that there are 1,300 cases in which the taxpayers have not proceeded where they have made application, and 500 claims which are standing over pending this decision. That shows the magnitude of the proposition.
It is said that business is suffering and that it is very difficult for the industries of the country to find the finance they require. Everyone understands the difficulties with which the business people of this country are confronted in finding the necessary facilities for finance. But,
after all, the businesses of the country depend upon the State being supported. It is just as difficult for the State to-day to find the money as it is for the various industries. Each depends upon the other, and accordingly it seems to me that when we are confronted, as we are now, with great difficulties in obtaining the necessary revenue for carrying on the ordinary business of the country, that consideration must be present to the minds of all. I am not in a position to accept the Amendment.

Sir A. WILLIAMSON: The Chancellor of the Exchequer has made a very able speech, as one naturally expected him to do, but he has put forward what I would describe as a very doubtful case. His argument seems to be that the Government were adopting a benevolent attitude towards the taxpayer and removing all doubts from his mind, and that the object was to prevent the litigation with which the country was threatened. I would point out to the Chancellor of the Exchequer that if he accepted the Amendment he would achieve the same object. There would be no more litigation and that bugbear would be moved from his mind.

Sir R. HORNE: The Amendment does not state the facts.

Sir A. WILLIAMSON: The facts are pretty well in the possession of the Committee. The Mover of the Amendment placed the case before the House with great ability and clearness. The facts of the case are that the Government made a mistake: It allowed a Bill to go through and to become an Act which did not carry out its intentions, and the Government now comes to the House and says, "We wish you to help us to deprive the taxpayer of an advantage which we have accidentally given to him." That is really the position, and is it just or right? Is it the position of the taxpayer when the mistake is against him and not in his favour? No leniency is shown then. He is told it is very unfortunate, but that it is the law and the injustice must be suffered.

Sir R. HORNE: That is exactly the point. What I say here is that it is not the law.

Sir A. WILLIAMSON: If the Chancellor of the Exchequer wishes to have it upon the merits and not upon the facts,
let us try to look at it from that point of view. He tells us the only proper and reasonable way to tax the people is upon a three-year average, even though in the fourth year they have no money to pay with. Yet the Government, only a few months or weeks ago, introduced a Bill to allow the taxpayer to pay upon the income of the year in question. How can he reconcile the attitude he has taken up to-night with the attitude of the Government a few weeks ago? It is quite impossible. The justice of the case, to my understanding, is that the taxpayer should pay when he has the money to pay, that he should pay each year upon his revenue for that year, and that we should abandon the system of the three-year average, as the Government intended to do in the Revenue Bill which they have now withdrawn. Why have they withdrawn it? On the pretext that there was some objection to the curtailing the powers of the Commissioners. The real objection was that it would relieve the taxpayer.

Sir R. HORNE: I really do not wish to intervene again, but it is necessary I should make the position clear. The Bill which the Government introduced could not have applied until 1922–23, and the Amendment deals with the payment for 1920–21.

Sir A. WILLIAMSON: I am quite aware of that. I was only endeavouring to illustrate the difference between the attitude of the Chancellor when the question arose to-night and the attitude of the Government when they introduced the Bill. However, if it is offensive to the Chancellor, I will not pursue it further. Really, this matter is more or less sub judice. It is very unfortunate that the Government should ask the House of Commons to pass legislation which will be retrospective for a period of twelve months, when it is known that there are innumerable cases waiting for-the decision of the Courts. It is also known that the Commissioners or the most important Commissioners—those in the City of London—have taken a strong and decided view, although other Commissioners have taken a different view from that. The real tribunal to decide what law is applicable to the year in question is the High Court and, if necessary, the House of Lords. I agree it is unfortunate to have to wait for a decision by the Courts, especially as we know the
decision of the House of Lords may not be given perhaps for a number of months. But the Amendment would do away with all that difficulty and would, in my judgment, meet the case.
Many people think this is a matter which only affects rich people and people who can afford to take what is called the rough with the smooth. I ask the House not to run away with that idea. Let them think of the tradespeople of this country—the shopkeepers holding dear stocks of goods, who have to face very serious loss in the present year and will have great difficulty in meeting the Income Tax calls that are to be made upon them. I went into a shop the other day and complained because they had not lowered the price of their goods. I said, "When you lower the price, I am willing to buy, but you have not lowered the price although raw material and many things are cheaper," and the tradesman said to me, "Think of the stock I have here. I have thousands of pounds worth of stock in this shop and I cannot afford to lower the price." There is a man who has very great difficulties because he will eventually have to lower the price. A heavy loss is staring him in the face and yet he is asked this year to pay Income Tax on the profits of two or three years back. Therefore, I say it is not a matter which affects only rich people. I daresay they can bear it better than the smaller people can, but I speak here to-night, not for the rich people at all; I speak for my constituents, and I urge the Committee to refuse to give to the Government this power to do an injustice by depriving people of relief which the Act of last year gave.

Lieut. - Commander WILLIAMS: I think we all agree that in the matter of taxation to-day it is essential that, before anything else, the State should be absolutely just in every detail of its incidence, and, as I understand the position, we have heard of the supposed injustice which may be inflicted on one section of the taxpayers, but we have not heard very much, except something from the Chancellor of the Exchequer, about those individuals having been in many cases through a period of very great prosperity, when, by paying on the three years' average, they were enabled to get out of a certain amount of their taxation. Now the time has come when their profits have
lowered and they are called upon to make up the difference which, in their prosperity, they were fortunate enough to escape. I cannot see that over the period of three years, although it may be very hard on them for the minute, and they may have spent the money already, they are going in the long run to be really out of pocket. When I got up I said it was a case of justice all round. There are many people in this country who pay their Income Tax on a fixed income entirely, and they pay on the three years' basis just the same. They have had their fixed income, and throughout the whole period of the War they have been paying on a fixed income, which may have gone back a very long while, at the highest rate of tax, and if you now give relief, or exemption, or help to those people who are now suffering and who have benefited, you are only going to do it at the expense of the people with the fixed rate of income. We ought to consider that point very strongly before we go against the Government in the decision which I am glad they have taken and in which I shall certainly support them.

Sir A. STEEL-MAITLAND: There are comparatively few points with which I wish to trouble the Committee, but perhaps I might ask the Chancellor of the Exchequer to be good enough to correct me if I make a mistake, as I do not wish to misrepresent him. At the same time, I cannot think that he has dealt quite fairly with the right hon. Member for the City of London (Sir F. Banbury); perhaps he misunderstood him. I do not think his interruption of the right hon. Member for Nairn (Sir A. Williamson) was quite fair either. Let me deal with some of the remarks of the Chancellor of the Exchequer, which, I am bound to say, seemed to me entirely unconvincing. I do not wish to lay stress on hard cases, but I think the Chancellor of the Exchequer said, in answer to the right hon. Baronet, that throughout the history of the Income Tax, since 1842, there were numerous cases at least as poignant as there are at present. I venture to take issue with him absolutely and definitely upon that statement. I do not believe for one single instant that there were ever cases as numerous and as poignant since 1842 on a par with
those occurring in the present year. I venture again to emphasise what has just been said by the right hon. Member for Nairn. It may be that some misunderstanding may be created in the minds of the Committee by a mere reference to City firms. It is not large firms in the City alone; it is a large number of men in business, great and small, throughout the country who are equally affected. Again, I think I am right in quoting the Chancellor of the Exchequer when he said, in answer to my right hon. Friend (Sir F. Banbury), that there have been many cases before of men being assessed at a sum higher than that which they earn. That was not the case that was put by my right hon. Friend. He put the case of a man actually paying in Income Tax a larger sum than he had actually earned. I do not believe that, at any rate, more than a quite minute fraction of cases like this have occurred previously, as compared with the cases that have been, and are, occurring at the present time.
The next point which the Chancellor of the Exchequer made was the great delay that would be occasioned if a case were allowed to be taken to the Courts. I would ask him to consider, in his legal capacity, if not as Chancellor of the Exchequer, whether that delay of, I think he mentioned, a period of two years, is really inevitable, and whether, when he talks of 500 cases all being dragged through litigation, that would really be the case. I am not skilled in the law, but I would ask any legal member of the Committee whether a case like this could not, by consent, be expedited; whether, if the Attorney-General applied, it could not be heard quickly before the High Court; whether it could not come before the Court of Appeal in six weeks, and, if need be, heard in the House of Lords in another six weeks; whether a little over three months could not settle the whole business one way or the other; and whether the other cases would not follow the ruling of the test case? Therefore, all this argument about protracted litigation falls entirely to the ground.
Let me take another point which the Chancellor of the Exchequer made, I think by way of correction of my right hon. Friend the Member for Nairn. My right hon. Friend referred to the proposed Section in the proposed Revenue Bill affecting the year 1922, when Income Tax
was only going to be assessed on the previous year. Let me ask what that really means. If there is any virtue in it being for the year 1922, and not for the present year, then I ask, do not the Government intend to be just as one-sided as they are making complaint with regard to the taxpayer at the present moment? If that is their defence, surely it means that up to the year 1922, they are claiming to extract Income Tax for a bad year on an average when rich years are brought in, and then, as soon as things are getting better, they are going to have them assessed on the better year. I will take two points in conclusion. This is not merely a question of hard cases—they are extremely hard—but I say again they are not parallel. They are without parallel. It is not merely a case of men well-to-do, but of men in much smaller businesses and poorer. But it is a case of principle as well. There is no question but that this is a case of retrospective legislation—one of which this House of Commons and Committee are always jealous, and very rightly jealous. It involves a principle that has been eschewed by the Exchequer itself and the Inland Revenue in their history up to date. May I give an instance—and I trust the right hon. Gentleman will correct me if I am wrong in these technical details? Up to quite recently the contrary was the case, that even though the Exchequer suffered—as they would suffer in this case—even so, they did not try to make their legislation retrospective. Let me give an instance.
There was a case before the courts not so very long ago, Stevens versus Boustead. The case was that certain companies had excluded from their assessment some of the profits which arise from land which they possessed, and the Exchequer came to the conclusion that under this provision they were getting exemption which they ought not to have. In 1918 they introduced into the Income Tax Act a provision whereby these people could no longer enjoy that exemption. But they did not attempt to make it retrospective. Not only that, but subsequent to 1918 cases were brought, appeals made, because of the rights the taxpayers enjoyed before 1918, and those were allowed and the sums repaid in certain cases. That has been the principle of the Exchequer up till now.
Now let me put a last point. The Chancellor of the Exchequer concluded his defence for the whole of this action of the Chancellor of the Exchequer last year, and for abolishing this right of the taxpayer, by referring to the report of the Committee. His words and those of his predecessor were, quoting the report:
That this Section gave a one-sided option to the taxpayer and did not give a corresponding option to the revenue.
If we are going to be fair let us be fair all round. If there is not to be a one-sided advantage for the taxpayer then there ought not to be a one-sided advantage for the Inland Revenue either. Quite recently another case, I understand, has been decided, Brown v. National Provident Institution. In that, case it was decided that it was true that profits which could be made on discounting Treasury bills could be taxed, but if in a subsequent year a particular person had made no profits from Treasury bills then the profits of the previous year should not be brought in. Although, however, that was then the decision arrived at by the Courts, yet people who would have been entitled to the benefit of that decision had paid under a mistake in law. If I am advised correctly, the Inland Revenue are refusing to give relief when the claim is now made for repayment in accordance with their proper rights. But the Chancellor of the Exchequer is going to get his own mistake in law put right by retrospective legislation. What is sauce for the goose is sauce for the gander, and that is what I ask the Chancellor of the Exchequer to consider. It is quite true that the Government of the country has to be carried on and must have the means to carry on. There is no one in this Committee who does not realise the hardness of the task of the Chancellor of the Exchequer. But one thing is quite true, and it is that in matters of taxation there ought to be confidence in the equity and fairness of the Inland Revenue. I wish to say without any offence that a sort of impression generally exists abroad that you cannot expect to be dealt with equitably by the Inland Revenue. Sums of money may have been paid or overpaid by mistake but the taxpayer is not allowed to have them back again. The Treasury stands to gain in the long run by fairness. If there was a real sense of fairness all round it would be easy for taxation to be levied and it would
be more readily and properly paid. It is because I believe there is no case whatsoever for this retrospective legislation, and because of the one sided action of the Inland Revenue, that I ask the House to support this Amendment.

Mr. HAYDAY: I do not pretend to go into the legal technicalities, nor can I pose as an expert on high finance, but I want to get in a practical point if I am correct. Am I to understand that the present or past practice has been that taxes have been payable on an average of income spread over the three immediately preceding years? If that be so, then, in conjunction with that, I must take the argument used by the Chancellor of the Exchequer that during the very prosperous periods the Exchequer has been at a loss by reason of the three years' average to the extent of £100,000,000. Putting those two statements together I take my mind to previous finance Debates as I have read them prior to being a Member of the House, and I do not remember having heard or read of any great outburst for this individual year assessment during the fat periods. If that had been so, then possibly the Exchequer would have been better off by that £100,000,000 which the right hon. Gentleman mentioned as having been lost. Now that we have come upon a very lean year, notwithstanding all the incomes upon which no taxation has been paid, taking a three years' average, we are asked to suddenly say, "Poor taxpayer! You have had seven or eight years of a fat period and now you have fallen upon lean times we will welcome you in and give you all the facilities; we will forgive the past, and you shall take your very worst year now as the basis for your taxation." And then, if in another year or two prosperity comes, the very same interests will be agitating for the re-institution of the three years' average. That is how it appeals to me, and, that being so, I hope the Chancellor of the Exchequer will not give way, One hon. Member opposite said this was not altogether a question of the rich class, that shopkeepers and wholesale traders came into the category, that they had big stocks which they had bought when prices were up. Why did they buy those stocks? Why did they corner those stocks? In the hope that they would be able to make
profit from them by holding up the people to ransom. Because conditions over which they have no control have proved they have made a bad bargain, they now want the full advantage of their miscalculation. Unless you are going to review the whole system of our taxation and grant relief all the way round, I see no special reason why you should single out those who have had the advantage when it came their way favourably, and should now give them what one might describe as special consideration because they happen temporarily to be at a disadvantage.

Mr. CHARLES EDWARDS: What about when they bought cheaply?

Mr. HAYDAY: We heard nothing then. That is when they got the benefit. This is how it appeals to me—it will not do unless you are going to grant relief all round. This is only one out of a long series of periods. Are we to have a state of affairs that will permit you at one time, when you fall on a lean time, to claim one year's income as a basis, and when you get into prosperous times to claim the three years' average? Surely this will rectify itself in time? If you had a bad year now, next year may be better, and the next again better still, and you will pay on that fair law of averages that suited you in days gone by, though it does not happen to appeal to you at the moment.

Mr. D. HERBERT: There is one point to my mind which absolutely vitiates the whole argument—a very clever argument, I admit—of the Chancellor of the Exchequer. He based his case upon what he stated was the decision of this House upon the point last year. That may be very well for a Chancellor of the Exchequer, but my right hon. Friend is an eminent lawyer, and he knows perfectly well that the courts of law take no notice whatever of what may have been the intentions of Members of the House of Commons, or what they stated in the Debates here. The Chancellor of the Exchequer is on the horns of a dilemma. If he is right in his interpretation of the Act, he has no need for this Clause whatever. If he is wrong, he is doing the thing which he himself condemns; he is going in for retrospective legislation, and not merely retrospective legislation, but retrospective financial legislation and
retrospective taxation. The point seems to me so serious that I venture again, in spite of my right hon. Friend's refusal, to implore him to consider this matter very carefully from that point of view. As the right hon. Baronet the Member for Erdington (Sir A. Steel-Maitland) said, just now, this case can be disposed of in a very few weeks, and in that connection it would be interesting to know whether the opinion of the Law Officers of the Crown has been taken on what is the effect of the Act last year. I venture, with some amount of confidence, unless I am told that their opinion has been taken and is to the contrary, to say that if the case were submitted to the present Attorney-General he would only give the same decision as was given by the Commissioners for the City of London.
The Government are taking upon themselves a very extraordinary responsibility if, in face of the evidence which there is in favour of the interpretation by the Commissioners of the City of London, instead of resorting to the Courts and getting a decision, as they could do within a couple of months by arrangement, they go in for this particular form of financial retrospective legislation. I am a whole-hearted supporter of the Government, but I want to warn the Chancellor of the Exchequer that it seems to me to be one of the maddest things that I have ever known a Government to attempt to do in recent times. I cannot help thinking that the old classical quotation
Quos Deus vult perdere prius dementat.
applies to the Chancellor of the Exchequer. As a supporter of the Government I say let it be a warning to him. I commend that to the Chancellor of the Exchequer. But as a supporter of the Government I refrain from giving their opponents the benefit of a translation.

Mr. N. CHAMBERLAIN: I find myself in some difficulty over this Amendment. I am against retrospective legislation, and if the right hon. Baronet the Member for the City of London (Sir F. Banbury) had moved the Amendment which stands in his name, which would have had the effect of omitting this Sub-section altogether and of leaving the interpretation of last year's legislation to the Courts, I should have voted with him. I would like to point out to the Committee that' if we pass this Amendment we are enacting retrospective legislation just as much as if we passed the Bill as
it stands, because the only effect is that it settles a question which is at present unsettled, and must remain unsettled until it is decided by the Courts; but it settles it in one way instead of, as the Bill would do, in another. Therefore, the argument as to retrospective legislation goes entirely by the board, and the Committee has to decide the question on its merits. On the merits it must at once be admitted that the effect of Sections 43 and 44 is one-sided. They are in favour of the taxpayer. He has the option of helping himself when circumstances suit him, and of leaving the ordinary three years' average to take its course when his profits are high. I suppose that the only justification for the enactment of these Sections was the fact that, as the right hon. Baronet (Sir A. Williamson) pointed out, it is not much consolation for a man who made high profits in previous years to have to pay tax on those profits if his profit in the year under consideration is low; and, just as many landlords have remitted rents to their tenants when times were hard, so that they might preserve their financial position and carry on their farms, and be able to pay their rents in future years, so it may have paid the Treasury to give some remittance of taxation when times were bad, in order not to put people out of business. If that is the justification, one can hardly imagine any circumstances in which there was a greater justification for it than those by which we are now faced, and that is the question before the Committee at the present time. They have to consider whether it is better to allow some remission of taxation now in order to keep people in business, and enable them to carry on their businesses till better times return, or whether it is better to demand the uttermost shilling now, in the belief that after all the traders can stand it. That is a question upon which personally I do not feel able to pass final judgment. Those who have the best information can decide it for themselves. As far as I am concerned, I am prepared to support the Government in whatever course they may decide upon.

Mr. R. RICHARDSON: I want to draw the attention of the Committee to the position of the worker who is called upon to pay Income Tax during the War years, and to ask them to remember that during the fat years, when wages were high,
there was no sort of relief open to the worker with regard to a three-years' average. Every quarter he was called upon, by deductions from his wages, to pay his full share of whatever he had earned during the three months. It would appear that people who took advantage of a three-years' average-probably two years lean and one fat—and got the advantage during the War, now want to swap horses and ask, when the lean year has come, that they should have the full benefit. Whatever is good for one class of the population of this country ought to be good for another. The worker all along the line has paid on whatver income he has earned throughout the years when wages were high, and now you are asking that he shall continue to pay as he paid before,

and that at this very time he should have to pay more because other people are seeking to pay less. In my opinion it is not quite fair that the people who have benefited during the years that have gone should ask to benefit at the expense of other people who have paid all the while. In my opinion, the Chancellor of the Exchequer is quite right in saying that what was good in 1918 and 1919 ought to be good in 1921, and these people ought to pay what they are called upon to pay. We had no chance whatever of any relief in that respect, and therefore I ask that they should pay their fair share when the lean times come.

Question put, "That the word 'not' stand part of the Clause."

The Committee divided: Ayes, 203; Noes, 31.

Division No. 172.]
AYES.
[11.1 p.m.


Adamson, Rt. Hon. William
Elliot, Capt. Walter E. (Lanark)
Lane-Fox, G. R.


Addison, Rt. Hon. Dr. Christopher
Eyres-Monsell, Com. Bolton M.
Larmor, Sir Joseph


Agg-Gardner, Sir James Tynte
Falle, Major Sir Bertram Godfray
Lawson, John James


Ainsworth, Captain Charles
Farquharson, Major A. C.
Lewis, Rt. Hon. J. H. (Univ., Wales)


Allen, Lieut.-Colonel William James
Fell, Sir Arthur
Lloyd-Greame, Sir P.


Amery, Leopold C. M. S.
Finney, Samuel
Locker-Lampson, Com. O. (H'tingd'n)


Bagley, Captain E. Ashton
Foreman, Sir Henry
Lort-Williams, J.


Baird, Sir John Lawrence
Forestier-Walker, L.
Loseby, Captain C. E.


Baldwin, Rt. Hon. Stanley
Forrest, Walter
Lunn, William


Barker, G. (Monmouth, Abertillery)
Fraser, Major Sir Keith
Mackinder, Sir H. J. (Camlachie)


Barlow, Sir Montague
Galbraith, Samuel
M'Lean, Lieut.-Col. Charles W. W.


Barnston, Major Harry
Gee, Captain Robert
Maclean, Neil (Glasgow, Govan)


Bell, Lieut.-Col. W. C H. (Devizes)
Gibbs, Colonel George Abraham
McMicking, Major Gilbert


Bellairs, Commander Carlyon W.
Gillis, William
McNeill, Ronald (Kent, Canterbury)


Benn, Sir A. S. (Plymouth, Drake)
Gilmour, Lieut.-Colonel Sir John
Macquisten, F. A.


Bennett, Sir Thomas Jewell
Glanville, Harold James
Manville, Edward


Bigland, Alfred
Graham, R. (Nelson and Colne)
Matthews, David


Birchall, Major J. Dearman
Green, Joseph F. (Leicester, W.)
Molson, Major John Elsdale


Bird, Sir A. (Wolverhampton, West)
Greenwood, William (Stockport)
Montagu, Rt. Hon. E. S.


Bird, Sir William B. M. (Chichester)
Griffiths, T. (Monmouth, Pontypool)
Moore-Brabazon, Lieut.-Col. J. T. C.


Borwick, Major G. O.
Grundy, T. W.
Moreing, Captain Algernon H.


Boscawen, Rt. Hon. Sir A. Griffith-
Guest, J. (York, W.R., Hemsworth)
Morgan, Major D. Watts


Bowerman, Rt. Hon. Charles W.
Hacking, Captain Douglas H.
Morris, Richard


Boyd-Carpenter, Major A.
Hall, F. (York, W.R., Normanton)
Morrison, Hugh


Breese, Major Charles E.
Hamilton, Major C. G. C.
Morrison-Bell, Major A. C.


Bridgeman, Rt. Hon. William Clive
Hartshorn, Vernon
Murray, John (Leeds, West)


Bromfield, William
Hayday, Arthur
Murray, William (Dumfries)


Brown, James (Ayr and Bute)
Henderson. Rt. Hon. A. (Widnes)
Neal, Arthur


Bruton, Sir James
Hennessy, Major J. R. G.
Newbould, Alfred Ernest


Buckley, Lieut.-Colonel A.
Henry, Denis S. (Londonderry, S.)
Newman, Sir R. H. S. D. L. (Exeter)


Burn, Col. C. R. (Devon, Torquay)
Hewart, Rt. Hon. Sir Gordon
Nicholson, Reginald (Doncaster)


Cairns, John
Hickman, Brig.-General Thomas E.
Norris, Colonel Sir Henry G.


Carter, W. (Nottingham, Mansfield)
Hills, Major John Waller
Palmer, Brigadier-General G. L.


Chadwick, Sir Robert Burton
Hinds, John
Parker, James


Chamberlain, Rt. Hn. J A. (Birm. W.)
Hirst, G. H.
Parkinson, John Allen (Wigan)


Chamberlain, N. (Birm., Ladywood)
Hodge, Rt. Hon. John
Parry, Lieut.-Colonel Thomas Henry


Churchman, Sir Arthur
Hopkins, John W. W.
Pease, Rt. Hon. Herbert Pike


Clough, Robert
Horne, Sir R. S. (Glasgow, Hillhead)
Peel, Col. Hn. S. (Uxbridge, Mddx.)


Cobb, Sir Cyril
Hunter-Weston, Lieut.-Gen. Sir A. G.
Philipps, Sir Owen C. (Chester, City)


Collins, Sir Godfrey (Greenock)
Hurst, Lieut.-Colonel Gerald B.
Pollock, Sir Ernest Murray


Conway, Sir W. Martin
Inskip, Thomas Walker H.
Pownall, Lieut.-Colonel Assheton


Coote, Colin Reith (Isle of Ely)
Jackson, Lieut.-Colonel Hon. F. S.
Pratt, John William


Cope, Major William
Jephcott, A. R.
Preston, W. R.


Cowan, D. M. (Scottish Universities)
Jodrell, Neville Paul
Pretyman, Rt. Hon. Ernest G.


Craig, Capt. C. C. (Antrim, South)
John, William (Rhondda, West)
Purchase, H. G.


Craik, Rt. Hon. Sir Henry
Johnstone, Joseph
Raffan, Peter Wilson


Davies, A. (Lancaster, Clitheroe)
Jones, G. W. H. (Stoke Newington)
Rankin, Captain James Stuart


Davies, Thomas (Cirencester)
Jones, J. J. (West Ham, Silvertown)
Redmond, Captain William Archer


Dewhurst, Lieut.-Commander Harry
Jones, J. T. (Carmarthen, Llanelly)
Rees, Sir J. D. (Nottingham, East)


Dockrell, Sir Maurice
Kellaway, Rt. Hon. Fredk. George
Reid, D. D.


Edwards, C. (Monmouth, Bedwellty)
Kelley, Major Fred (Rotherham)
Renwick, George


Edwards, G. (Norfolk, South)
Kenyon, Barnet
Richardson, Alexander (Gravesend)


Edwards, Major J. (Aberavon)
King, Captain Henry Douglas
Richardson, R. (Houghton-le-Spring)


Roberts, Rt. Hon. G. H. (Norwich)
Stanley, Major Hon. G. (Preston)
Waterson, A. E.


Roberts, Samuel (Hereford, Hereford)
Steel, Major S. Strang
Wheler, Col. Granville C. H.


Robertson, John
Stewart, Gershom
White, Col. G. D. (Southport)


Roundell, Colonel R. F.
Sturrock, J. Long
Williams, C. (Tavistock)


Royds, Lieut.-Colonel Edmund
Sugden, W. H.
Wilson, W. Tyson (Westhoughton)


Sanders, Colonel Sir Robert Arthur
Taylor, J.
Wise, Frederick


Sassoon, Sir Philip Albert Gustave D.
Thomson, F. C. (Aberdeen, South)
Wood, Hon. Edward F. L. (Ripon)


Seddon, J. A.
Thomson, Sir W. Mitchell- (Maryhill)
Wood, Sir H. K. (Woolwich, West)


Seely, Major-General Rt. Hon. John
Thorpe, Captain John Henry
Worsfold, T. Cato


Sexton, James
Townley, Maximilian G.
Worthington-Evans, Rt. Hon. Sir L.


Shaw, Hon. Alex. (Kilmarnock)
Townshend, Sir Charles Vere Ferrers
Young, E. H. (Norwich)


Shaw, Capt. William T. (Forfar)
Tryon, Major George Clement
Young, Robert (Lancaster, Newton)


Short, Alfred (Wednesbury)
Turton, Edmund Russborough



Simm, M. T.
Wallace, J.
TELLERS FOR THE AYES.—


Sitch, Charles H.
Walsh, Stephen (Lancaster, Ince)
Colonel Leslie Wilson and Mr.


Spencer, George A.
Walton, J. (York, W. R., Don Valley)
Dudley Ward.


NOES.


Acland, Rt. Hon. Francis D.
Goulding, Rt. Hon. Sir Edward A.
Lyle, C. E. Leonard


Ashley, Colonel Wilfrid W.
Gretton, Colonel John
Maitland, Sir Arthur D. Steel-


Barnett, Major Richard W.
Gritten, W. G. Howard
Marriott, John Arthur Ransome


Bowyer, Captain G. W. E.
Hall, Rr-Adml Sir W.(Liv'p'l,W.D'by)
Nicholson, William G. (Petersfield)


Brittain, Sir Harry
Hannon, Patrick Joseph Henry
Oman, Sir Charles William C.


Bull, Rt. Hon. Sir William James
Herbert, Col. Hon. A. (Yeovil)
Poison, Sir Thomas A.


Coats, Sir Stuart
Herbert, Dennis (Hertford, Watford)
Sprot, Colonel Sir Alexander


Davison, Sir W. H. (Kensington, S.)
Hopkinson, A. (Lancaster, Mossley)
White, Charles F. (Derby, Western)


Du Pre, Colonel William Baring
Kiley, James Daniel
Wills, Lt.-Col. Sir Gilbert Alan H.


Ford, Patrick Johnston
Locker Lampson, G. (Wood Green)



Foxcroft, Captain Charles Talbot
Lowther, Major C. (Cumberland, N.)
TELLERS FOR THE NOES.—




Sir F. Banbury and Mr. Holmes.

The CHAIRMAN: That disposes of the rest of the Amendments to this Clause on the Paper.

Clause ordered to stand part of the Bill.

CLAUSE 19.—(Rule 3 (1) of Miscellaneous Rules applicable to Schedule D not to apply if person charged carries on trade throughout year of assessment.)

(1) Paragraph (1) of Rule 3 of the Miscellaneous Rules applicable to Schedule D shall not apply in any case where the person charged to tax has continued to carry on throughout the year of assessment the trade, profession, employment or vocation in respect of which the assessment was made.

(2) This Section shall be deemed to have been in force as respects Income Tax (including Super-tax) charged for the year 1920–21, and all such adjustments, amendments of assessments, and payments of tax (including Super-tax) shall be made as are necessary for giving effect to the provisions of this Sub-section.

The CHAIRMAN: The Amendment in the name of the hon. Member for the Wood Green Division (Mr. G. Locker-Lampson)—to leave out Sub-section (1) and to insert
(1) Where, under Rule 3 of the Miscellaneous Rules applicable to Schedule D, a person has obtained relief in consequence of diminished profits, he shall be assessed for each of the two years following the year of assessment in respect of which relief has been granted on the actual profit of those years respectively—
is not in Order, because it might in individual cases increase the charge.

Mr. LOCKER-LAMPSON: If in line 2 after the word "shall," I insert the words, "if he so claim," it would be in the taxpayer's own option whether he claims or not. I take it that would not necessarily increase the charge. Would that be in order?

The CHAIRMAN: Yes, I think would be in order.

Mr. LOCKER-LAMPSON: Does the right hon. Gentleman want to go on with the Clause now? I understood that if the Government got to the end of Clause 18 by 11 o'clock they would not proceed further.

Sir R. HORNE: I should be very glad if the Committee would give us Clause 19 to-night, because it finishes this particular topic of debate. We can then start a fresh topic when the Committee stage is resumed.

Mr. LOCKER-LAMPSON: I beg to move to leave out Sub-section (1), and to insert instead thereof a new Sub-section—
(1) Where, under Rule 3 of the Miscellaneous Rules applicable to Schedule D, a person has obtained relief in consequence of diminished profits, he shall, if he so claim, be assessed for each of the two years following the year of assessment in respect of which relief has been granted on the actual profit of those years respectively.
This Rule 3 provides that relief should be given when a person ceases to carry on a trade in respect of which the assessment has been made, or supposing he dies or
becomes bankrupt or from any other specific cause loses the profits on which he is assessed. Hitherto that relief has been granted where the profits have diminished in the year of assessment from some specific cause. For instance, I believe that lately two companies have gone to the courts and obtained that relief. I believe that a coal company obtained relief under this particular rule because it suffered from acute depression of trade and did not get the normal profits, and recently I believe that a brewery company was able to obtain relief under this rule because the license charge were increased, and there have been various other specific cases in which relief has been given.
I may give an illustration of the way in which relief works out under the rule which the Government now propose to abolish. Assuming an average profit for the, three years, 1917–20, of £1,000— that is the basis of the tax for 1920–21— but the actual profit for that year was £500. Owing to specific causes, up to now the taxpayer has been able under this particular rule to appeal, and if he proved the specific causes, the assessment has been reduced to the £500. He only paid on the £500. Now assuming that the business is continued and recovers speedily, and makes £2,000 the following year, then under this rule the taxpayer pays only on £850. The Treasury, I imagine, say that "The taxpayer cannot have it both ways. We must put an end to this rule, and make him pay on the average." I can quite see that the Government in a real sense are more or less justified in saying that the taxpayer cannot have it in both ways. Certain hard cases will arise under this particular provision if it is carried out. Suppose a business has been working on very advantageous terms in connection with an agreement with people who govern the source of supply of any particular commodity, and suppose the agreement is suddenly terminated or is renewed on very much less advantageous terms. The business struggles on; it continues, but gives the taxpayer very much less profit. Without some kind of relief very great hardship will be suffered in such a case. Suppose that the average profits up to and including 1919–20 were £1,000, during 1920–21 the specific cause, whatever it may be, brings the profits down to £500. There is absolutely no
hope that there is to be any recovery in the particular business. For the next two years, in each year, for the whole three years, the profits are only £500. Under this Clause relief will not be granted, and the taxpayer, instead of paying on £500, in these two years will pay on £833 and £677 respectively. In fact during the three years he would pay on an average of £2,500, when in reality he has had an income of only £1,500.
There are various other examples that might be chosen. Take a solicitor or a stockbroker who has a permanent and rather small clientele. Suppose that half the clientele die in a certain year. A case came before the Courts the other day, known as Green's case, in which half the clientele died in a single year. I know that hard cases make bad law. The matter has been rather prejudiced by this rule of order which prevents me raising the subject in the form in which I wished to raise it. My point is that a business may continue but may continue at very much less profit. I wish that the Chancellor of the Exchequer would think out some scheme by which if a business does continue— according to this section the business has to discontinue altogether and come permanently to an end in order to get the privilege—but at far less profit, the taxpayer would be allowed to pay, not on the average; but on the actual profits of the two following years, the two years following that in which the specific cause arises.

Sir R. HORNE: I appreciate what my hon. Friend is trying to achieve, but I am not sure that his object is not met under the provisions dealing with the position of the successor to a business where the profits have dropped by reason of the change in the business. I should like to address myself to the point which the first part of the Amendment raises, namely, the leaving out of Sub-section (1) which contains the main object of the Clause. There has been in existence for a number of years—in fact since the Act of 1842—a definite provision which states that if a person charged under this Schedule ceases to carry on the trade, profession, employment or vocation in respect of which the assessment is made, or dies, or becomes bankrupt before the end of the year of assessment or from any other specific cause is deprived of the profit or gains, he or his executor or administrator
may within three months apply to the Commissioners for amendment of the assessment. As the Committee will see, that gave an opportunity for making an adjustment of the assessment where a business came to an end through the person dying or becoming bankrupt before the end of the year of assessment, but it added words which one often finds in Acts of Parliament—"or from any other specific cause." According to the ordinary rules of legal interpretation, ether causes following upon the named causes are said to be only causes of the same nature. During all this long period of time there were only one or two cases in which relief was claimed on the ground of any cause other than the death or bankruptcy of the taxpayer. There have been two cases—to which my hon. Friend referred—which came before the Commissioners. There is no appeal from the Commissioners upon such an application to the courts of law, and consequently there is no legal decision upon the matter at all.
When every taxpayer is seeking to find a possible loophole to escape from payment, this section is now being called in aid of claims, although in all those years it never occurred to the ingenuity of more than one or two people to utilise it. The death or bankruptcy of the taxpayer was understood to be the ground upon which such relief could be claimed. It has never been said—except in these one or two cases— that relief could be claimed on the ground that profits had fallen off in any particular year. It is perfectly plain if such ground of relief had been intended it would have been stated in quite another form. In the present year applications began to be made upon this ground. Already eight applications have been heard before the Commissioners, six of which have been decided in favour of the Inland Revenue and two in favour of the applicants, and in a large number of cases where applications have been made, the taxpayers concerned have been satisfied with the reply of the Inland Revenue and have not proceeded further. It is of the utmost moment, and it is only wise, that we should let people know where they

are upon this matter, and that we should not have a perpetual series of applications, of this kind holding up the ordinary assessments and impeding the flow of the-revenue. We ought to make it thoroughly well understood that this rule cannot be prayed in aid by an applicant simply owing to the adverse circumstances of his business. It is really declaratory of the law.

Mr. HOLMES: It is declaratory of what the right hon. Gentleman wants now, but not of what has always been believed to be the law. This question of a specific cause has always been difficult. It has mainly been given effect to when there was a change in partners. In the ordinary way a new firm carrying on a business had to pay tax on the three years' average of its predecessors, but owing to a change in partnership it was able to plead a specific cause, if it could show that the skill of the deceased or retired partner had been lost to the firm and that in consequence they were not able to make such large profits. As the right hon. Gentleman said, a number of firms are now pleading decreased profits due to trade depression as a reason why they should not pay on the three years' average. There was a decision in the High Court on this matter in 1881 in the case of the Ryhope Coal Co. v. Foyer. The Court held that the extraordinary depression in the iron and coal trade, where the Ryhope Coal Co. was unable to sell either so large a quantity of coal or to obtain so good a price as formerly, was a specific cause, and I put it to the right hon. Gentleman that that has been a legal decision for 40 years, and that therefore he is now not interpreting the intention of the law, but is actually altering the law as decided by a High Court case. It is for the Committee to decide what should be done, and it is for him to advise what he thinks-should be done, but I oppose altogether his suggestion that he is merely giving us now the law as it was always intended to be.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 161; Noes, 18.

Division No. 173.]
AYES.
[11.30 p.m.


Adamson, Rt. Hon. William
Baird, Sir John Lawrence
Barnston, Major Harry


Addison, Rt. Hon. Dr. Christopher
Baldwin, Rt. Hon. Stanley
Bell, Lieut.-Col. W. C. H. (Devizes)


Agg-Gardner, Sir James Tynte
Barlow, Sir Montague
Bellairs, Commander Carlyon W.


Amery, Leopold C. M. S.
Barnett, Major Richard W.
Benn, Sir A. S. (Plymouth, Drake)


Betterton, Henry B.
Hacking, Captain Douglas H.
Palmer, Brigadier-General G. L.


Bigland, Alfred
Hamilton, Major C. G. C.
Parker, James


Bird, Sir William B. M. (Chichester)
Hartshorn, Vernon
Parkinson, John Allen (Wigan)


Borwick, Major G. O.
Hayday, Arthur
Parry, Lieut.-Colonel Thomas Henry


Boscawen, Rt. Hon. Sir A. Griffith-
Henderson, Rt. Hon. A. (Widnes)
Pease, Rt. Hon. Herbert Pike


Bowerman, Rt. Hon. Charles W.
Hennessy, Major J. R. G.
Peel, Col. Hon. S. (Uxbridge, Mddx.)


Boyd-Carpenter, Major A.
Henry, Denis S. (Londonderry, S.)
Pollock, Sir Ernest Murray


Breese, Major Charles E.
Herbert, Dennis (Hertford, Watford)
Pratt, John William


Bridgeman, Rt. Hon. William Clive
Hewart, Rt. Hon. Sir Gordon
Purchase, H. G.


Bromfield, William
Hills, Major John Waller
Raffan, Peter Wilson


Brown, James (Ayr and Bute)
Hinds, John
Rankin, Captain James Stuart


Bruton, Sir James
Holbrook, Sir Arthur Richard
Renwick, George


Buckley, Lieut.-Colonel A.
Holmes, J. Stanley
Richardson, Alexander (Gravesend)


Bull, Rt. Hon. Sir William James
Hopkins, John W. W.
Richardson, R. (Houghton-le-Spring)


Burn, Col. C. R. (Devon, Torquay)
Horne, Sir R. S. (Glasgow, Hillhead)
Roberts, Rt. Hon. G. H. (Norwich)


Carter, W. (Nottingham, Mansfield)
Hotchkin, Captain Stafford Vere
Roberts, Samuel (Hereford, Hereford)


Chamberlain, Rt. Hn. J. A. (Birm., W.)
Hurd, Percy A.
Roundell, Colonel R. F.


Churchman, Sir Arthur
Inskip, Thomas Walker H.
Sanders, Colonel Sir Robert Arthur


Clough, Robert
Jephcott, A. R.
Sassoon, Sir Philip Albert Gustave D.


Coats, Sir Stuart
Jodrell, Neville Paul
Seely, Major-General Rt. Hon. John


Coote, Colin Reith (Isle of Ely)
John, William (Rhondda, West)
Sexton, James


Cope, Major William
Johnstone, Joseph
Shaw, Capt. William T. (Forfar)


Cowan, D. M. (Scottish Universities)
Jones, J. J. (West Ham, Silvertown)
Short, Alfred (Wednesbury)


Craig, Captain C. C. (Antrim, South)
Jones, J. T. (Carmarthen, Llanelly)
Simm, M. T.


Craik, Rt. Hon. Sir Henry
Kellaway, Rt. Hon. Fredk. George
Sitch, Charles H.


Davies, A (Lancaster, Clitheroe)
King, Captain Henry Douglas
Spencer, George A.


Davies, Thomas (Cirencester)
Lane-Fox, G. R.
Stanley, Major Hon. G. (Preston)


Dewhurst, Lieut.-Commander Harry
Larmor, Sir Joseph
Stewart, Gershom


Du Pre, Colonel William Baring
Lawson, John James
Sugden, W. H.


Edwards, C. (Monmouth, Bedweilty)
Lloyd-Greame, Sir P.
Thomson, F. C. (Aberdeen, South)


Edwards, Major J. (Aberavon)
Locker-Lampson, Com. O. (H'tingd'n)
Thomson, Sir W. Mitchell- (Maryhill)


Elliot, Capt. Walter E. (Lanark)
Lort-Williams, J.
Thorpe, Captain John Henry


Entwistle, Major C. F.
Loseby, Captain C. E.
Townley, Maximilian G.


Eyres-Monsell, Com. Bolton M.
Lunn, William
Townshend, Sir Charles Vere Ferrers


Falle, Major Sir Bertram Godfray
Lyle, C. E. Leonard
Tryon, Major George Clement


Farquharson, Major A. C.
Mackinder, Sir H. J. (Camlachle)
Wallace, J.


Finney, Samuel
M'Lean, Lieut.-Col. Charles W. W.
Waterson, A. E.


Ford, Patrick Johnston
McNeill, Ronald (Kent, Canterbury)
White, Col. G. D. (Southport)


Forestier-Walker, L.
Mallalieu, Frederick William
Willey, Lieut.-Colonel F. V.


Forrest, Walter
Manville, Edward
Williams, C. (Tavistock)


Fraser, Major Sir Keith
Mitchell, William Lane
Wills, Lt.-Col. Sir Gilbert Alan H.


Gibbs, Colonel George Abraham
Molson, Major John Elsdale
Wise, Frederick


Gilmour, Lieut.-Colonel Sir John
Montagu, Rt. Hon. E. S.
Wood, Hon. Edward F. L. (Ripon)


Glanville, Harold James
Moore-Brabazon, Lieut.-Col. J. T. C.
Worthington-Evans, Rt. Hon. Sir L.


Glyn, Major Ralph
Moreing, Captain Algernon H.
Young, E. H. (Norwich)


Goulding, Rt. Hon. Sir Edward A.
Morgan, Major D. Watts
Young, Robert (Lancaster, Newton)


Graham, R. (Nelson and Colne)
Murray, John (Leeds, West)
Younger, Sir George


Green, Joseph F. (Leicester, W.)
Murray, Major William (Dumfries)



Greenwood, William (Stockport)
Neal, Arthur
TELLERS FOR THE AYES.—


Griffiths, T. (Monmouth, Pontypool)
Newman, Sir R. H. S. D. L. (Exeter)
Colonel Leslie Wilson and Mr.


Guest, J. (York, W. R., Hemsworth)
Nicholson, Reginald (Doncaster)
Dudley Ward.


NOES.


Bowyer, Captain G. W. E.
Marriott, John Arthur Ransome
Wilson, Rt. Hon. J. W. (Stourbridge)


Cecil, Rt. Hon. Lord R. (Hitchin)
Oman, Sir Charles William C.
Wilson, W. Tyson (Westhoughton)


Davison, Sir W. H. (Kensington, S.)
Robertson, John
Young, Sir Frederick W. (Swindon)


Gretton, Colonel John
Steel, Major S. Strang



Hannon, Patrick Joseph Henry
Walsh, Stephen (Lancaster, Ince)
TELLERS FOR THE NOES.—


Hickman, Brig.-Gen. Thomas E.
Wheler, Col. Granville C. H.
Sir Frederick Banbury and Major


Locker-Lampson, G. (Wood Green)
Williams, Aneurin (Durham, Consett)
Christopher Lowther.


Maitland, Sir Arthur D. Steel-

Colonel Sir A. HOLBROOK: I beg to move, at the end of Sub-section (1), to insert the words
But the specific cause from which the person charged is, under the paragraph (1) referred to, deprived of profit shall not necessarily be a specific cause of similar nature, but other specific causes, such as, for instance, a disastrous fire, shall entitle the person charged to apply for amendment of the assessment.
I trust this addition will be accepted by the Chancellor of the Exchequer, because it does not bring forward any contentious matters, but is rather with the idea of making the Clause clearer.

Sir R. HORNE: This will exactly contradict what we have just decided. The Amendment proposed admits that, but says: "Oh, yes, but this must still apply in the case of a disastrous fire."

Mr. S. WALSH: So it should!

Sir R. HORNE: We can scarcely pass an Amendment contradictory to what we have decided.

Amendment negatived.

Clause ordered to stand part of the Bill.

Sir R. HORNE: As there are no Amendments on the Paper to Clauses 20, 21 and 22, I hope the Committee will agree to take them to-night, in order that we may resume the Committee on Clause 23.

Clauses 20 (Power of holder of certain Government securities to require income tax to be deducted before payment of interest), 21 (Evidence of payment of wages in certain proceedings for recovery of income tax), and 22 (Exemption from income tax for funds of special and supplementary schemes under 10 & 11 Geo. 5), ordered to stand part of the Bill.

Committee report Progress; to sit again upon Monday next.

DANGEROUS DRUGS ACT, 1920 (DRAFT REGULATIONS).

Captain CHARLES CRAIG: I beg to move,
That a humble Address be presented to His Majesty praying him to annul Regulation 4 of the Draft Regulations made under The Dangerous Drugs Act, 1920, laid upon the Table of this House on the 24th day of May.
I placed this Motion on the Paper for the purpose of drawing attention to certain hardships inflicted on Irish farmers by the Regulations which are at present lying on the Table, and which have been made in pursuance of the Dangerous Drugs Act. Laudanum is the principal drug we are concerned with in this matter. Laudanum is kept, as a rule, by farmers for the purpose of dosing horses and cattle in case of certain complaints, principally in the case of colic. Under the Dangerous Drugs Act, however, and the Regulations we are now considering, laudanum in future can only be purchased in the form of a prescription, and therefore the custom which has obtained in the past of farmers keeping a certain amount of laudanum in the house for the purpose of dosing horses and cattle at a moment's notice will no longer be permitted. This may not appear to be a serious matter, but it is really a hardship to the farmers, who must now, under the Regulations, procure a prescription from a veterinary surgeon. Very often a veterinary surgeon is not to be had within miles of where the farmer lives, money and time are wasted in getting the prescription in the first
instance, and in getting it made up in the second. I have reason to believe that the Home Office is willing to make some modification of the Regulations on this point and to arrange in some way for laudanum to be obtained by the farmer on some sort of certificate given by the police or some other body, saying that he is a fit and proper person to have laudanum served out to him, and specifying the amount he will be able to get. That is shortly the case of the farmer.
I also want to draw attention to the hardship which is inflicted on a class of merchants in Ireland called chemists and druggists. There are two bodies in Ireland who have to deal with drugs—the pharmaceutical chemists and the chemists and druggists. The difference between the two is that the pharmaceutical chemists are the people who have the monopoly of prescriptions. The chemists and druggists, before the passing of the Dangerous Drugs Act, were able to sell poisons of any kind but not to compound prescriptions. Under the Regulations the drugs specifically mentioned in the Act can only be served out in the form of prescriptions, which means that the chemists and druggists who have hitherto had the right of selling these drugs have now had that right taken away from them. That is a serious thing for these people, because the sale of this particular drug, laudanum forms a very considerable item in their business. It seems hard that because there is a certain amount of drug-taking in some of the large cities, these people should be deprived of one of the principal items of their business. I would ask the representative of the Home Office to try, if he can, to meet the chemists and druggists, so as to enable them, in the first instance, to sell laudanum on the certificate I have suggested—which I have reason to believe they would be willing to do—and secondly, to make a declaration that these chemists and druggists will be at liberty to sell patent medicines, or medicines which are already made up—for instance, chlorodyne and zinc ointment, which I understand contains a prohibited drug, and other things of that kind, not actually compounded by them, which they receive from the manufacturers, but which, owing to the fact that they have no right to compound or sell prescriptions, they are unable at present by law to sell. I trust the representative of the
Home Office will find himself able to meet me in these two respects.

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Sir John Baird): The first point made by my hon. and gallant Friend can easily be met. The Committee which was appointed by the Home Secretary to examine the complaints made in regard to the draft Regulations reported—on page 9 of their Report—that it was certainly necessary to meet the case of the farmers, as put by my hon. and gallant Friend. The Committee suggested that this could easily be done in one of two ways—either by selling laudanum in a de-natured form, or else, pending the discovery of some method of denaturing laudanum, by a certificate being issued to the farmers by the local police which would entitle the farmers to obtain laudanum. It is the intention of my right hon. and gallant Friend to issue a form of certificate to the local police, and I think that will meet the case. That will, of course, be done in plenty of time before the Regulations take effect en 1st December.
In the case of the chemists and druggists, such legal opinion as we have been able to take and as has been available holds that though the chemists and druggists are prohibited from compounding mixtures, they are entitled to dispense made-up prescriptions of something they have not made up themselves. There is a further point in regard to that, that is the considerable list of drugs which are exempted. Taking those two things together—the exempted drugs as contained in Schedule 2 and the belief that we hold that the druggist will be entitled to dispense mixtures containing poisons which he has not himself compounded—I hope I have met my hon. and gallant Friend's point.

Mr. KILEY: The Under-Secretary has not stated what is to happen in the case of a refusal on the part of the superintendent of police. Supposing that, of two superintendents in adjoining counties, one says it is quite a proper thing to grant these applications, while the one in the adjoining county thinks it is improper, what appeal, if any, is there for the individual whose neighbour or acquaintance in the one county gets what he wants
while in the other there is a refusal? I fail to understand, and the Under-Secretary has not told us, why the right is taken away from the chemist of doing his compounding, as he has been able and privileged to do.

Sir J. BAIRD: Not these chemists. They have never had the power. This applies to chemists and druggists in Ireland.

Mr. KILEY: Do I understand that the chemist in Ireland is not being prejudiced as compared with the chemist in England?

Sir J. BAIRD: There are two classes of chemists in Ireland. There is one class that does not exist here. They are druggists, and they have never had this power, so that we are not taking anything from them.

Mr. KILEY: A deputation of Irish chemists came to me the other day, and I naturally presumed that they were enjoying the same privileges which the chemists of England were enjoying. If I am wrong, and if the Irish chemists are going to be permitted to enjoy the privileges which they have enjoyed in the past, I will not detain the House any longer.

Sir J. BAIRD: Perhaps, with the permission of the House, I may clear up the point which the hon. Member has raised. The police authorities have not to state whether a man is entitled to be given laudanum. The certificate to be granted by the police authorities, which will be on a form supplied by the Home Office, will be to the effect that the man is a bonâ fide farmer or stockowner. That is a matter of fact, and not of opinion.

Captain CRAIG: I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

The remaining Orders were read, and postponed.

It being after half-past Eleven of the clock, Mr. Speaker adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Two Minutes before Twelve o'clock.